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CLEP Macroeconomics - 3

Subjects : clep, economics
Instructions:
  • Answer 50 questions in 15 minutes.
  • If you are not ready to take this test, you can study here.
  • Match each statement with the correct term.
  • Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. The maximum amount that an economy can output over a period of time






2. Real Estate - Equipment - and Cash (physical assets)






3. Describes how the economy directly effects the actions policymakers take.






4. Combines pure market and command. Example: Japan






5. That efficiency leads to economic prosperity for all.






6. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus






7. The level of output where output equals planned aggregate expenditure






8. Refers to individuals between jobs seeking new employment - people re-entering the workforce (ie mom whose kids are grown) - and new entrants (ie college graduates).






9. Total supply of goods and services in an economy






10. A flaw in the CPI that exaggerates real increases in the cost of living by failing to take into account customers ability to choose equally desirable goods or services when the price of their preferred good or service increases






11. The total demand for a country's output. It includes demands for consumption - investment - government purchases - and net exports.






12. The smallest dollar amount for which a seller would be willing to sell an additional unit - generally equal to marginal cost

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13. The movement of workers between jobs - companies - and industries






14. When both producers and consumers are satisfied with their quantities at market price.






15. The relationship between disposable income and spending on consumable goods and services






16. The international sector emphasizes the ________ rate.






17. Payments that the government makes to unemployed workers.






18. When inflation suddenly deviates from its normal course.






19. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.






20. Patents - Goodwill - and Trademarks (lack physical substance)






21. When an economic unit makes more than it spends






22. On a demand curve - the _____ of the item is placed on the vertical axis of the graph.






23. In a traditional economic system - the availability of resources is based on inheritance. Goods are only produced for consumption and surpluses do not occur. This type of economy is normally found in South American - Asian - and African countries.






24. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally






25. Programs and economic policies such as income taxes - unemployment insurance and TANF (Temporary Aid to Needy Families) that are automatically in place - help to decrease fluctuations in the GDP.






26. A GDP decline that lasts two-quarters (six months). A period of slow economic growth






27. A Scottish man (1723-1790) who is known as the father of modern economics.






28. The labor sector highlights the rate of ____ .






29. The percentage of working-age people within the labor force






30. Long Run Aggregate Supply - The natural level of GDP - shown vertical on a graph. When LRAS shifts - SRAS (Short Run Aggregate Supply) will follow .






31. A policy that affects potential output






32. An extreme decline in the rate of inflation. Can lead to high levels of unemployment and recessionary gaps.






33. The continuing increase in the average level of prices of goods and services over time.






34. Represents the governmental tax rate that will best maximize tax revenues.






35. Total tax paid divided by total (taxable) income - as a percentage.






36. The economic theory that states the main cause of change in aggregate output and price level is the result of monetary supply and the interest rate that comes from the amount of monetary supply






37. The real cost of changing a listed price.






38. Demonstrates that there is an inverse relationship between inflation and unemployment; as inflation increases - unemployment decreases (and vice versa).






39. The part of economics study that looks at the operation of a nation's economy as a whole






40. Goods not counted in the nation's GDP.






41. The slow change in inflation from year to year in industrialized nations






42. The output per employed worker






43. Short-run macroeconomic equilibrium occurs at the level of GDP where the:






44. The ease with which an asset can be converted to currency.






45. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.






46. When prices fall consistently over time - leading to negative inflation.






47. An increase in this would cause an increase in the aggregate supply






48. The time period between a policy's implementation and its desired effects on an economy.






49. The tendency for nominal interest rates to be high when inflation rates are high and low when inflation rates are low.






50. Unicorporated entity that has shared ownership.