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Test your basic knowledge |
CLEP Macroeconomics - 3
Start Test
Study First
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. There is an ___________ ___ when aggregate output is above potential output
Intangible Assets
Capitalism
Boom
Inflationary gap
2. The ease with which an asset can be converted to currency.
Policy reaction function
Economic efficiency
Potential output
Liquidity
3. Used in the production of final goods - but instead of being consumed - are available for reuse.
Boom
Lorenz curve
Capital goods
The rate of inflation
4. Goods and services sector - Labor sector - monetary sector - international sector.
Recession
LRAS
Business cycle
Four sectors of the economy
5. The output per employed worker
Marginal benefit
Labor productivity
Credibility of monetary policy
Boom
6. The annual percentage rate of change in price level reflected by price indexes
Policy reaction function
Potential output
The principle of efficiency
The rate of inflation
7. When people's expectations of future inflation do not change even though inflation rates change.
Law of Diminishing Marginal Utility
Recession
Capital income
Anchored inflation expectations
8. Maximum price that a customer is willing to pay for a good
Expansionary policies
Aggregate supply shock
Reservation price
Inflationary gap
9. Represents the governmental tax rate that will best maximize tax revenues.
Seller's reservation price
Relative price
Laffer curve
Boom
10. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.
Real GDP
Monopsony
Complement
Interest
11. Government policies intended to avoid inflation and other effects due to increased expansion. Includes: Action such as decreasing government spending - increasing taxes - and decreasing the supply of money - and raising interest rates.
Contractionary policies
Labor supply
Consumption function
Socially optimal quantity
12. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
Autonomous Expenditure
Equilibrium price
Sunk cost
decreases increases
13. The goods and services sector focuses largely on the level of ______ .
Businesses
Income
Lorenz curve
Fisher effect
14. The law that states that as the price of any good or service increases - the quantity of that good or service will increase and vice versa.
Keynesian economic theory
Labor productivity
Law of Supply
Capital income
15. The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.
Socially optimal quantity
Phillips curve
Reservation price
Capital income
16. A measure of overall price levels at a specific point in the price index.
Price level
Inflationary gap
Labor supply
Deflation
17. When an economic unit makes more than it spends
Structural policy
Saving
Law of Demand
Nominal GDP
18. When economists fail to account for improvements in goods or services and incorrectly report inflation as higher.
The quality adjustment bias
Adam Smith
Labor unions
Boom
19. When prices fall consistently over time - leading to negative inflation.
Labor supply
Core rate of inflation
Deflation
Intangible Assets
20. When both producers and consumers are satisfied with their quantities at market price.
Price
Market equilibrium
Gross Domestic Product (GDP)
Inflationary gap
21. The total demand for a country's output. It includes demands for consumption - investment - government purchases - and net exports.
Nominal GDP
Aggregate demand
Inflation
Socially optimal quantity
22. Money multiplied by velocity equals nominal GDP.
Quantity equation
Market equilibrium
Aggregate demand
Real employment
23. The government office that is responsible for projecting federal surpluses and deficits
Real GDP
The rate of inflation
Inflation inertia
Congressional budget office
24. The international sector emphasizes the ________ rate.
Automatic stabilizers
Exchange
Gross Domestic Product (GDP)
Total surplus
25. An economic system in which all factors of production are owned and controlled by the government. Often referred to as a centrally planned economic system. Example: Former Soviet Union.
Tangible Assets
Worker mobility
Price level
Command economic system
26. The price of a good or service in relation to the price of other goods and services.
The principle of efficiency
Relative price
Menu cost
Gross Domestic Product (GDP)
27. Total tax paid divided by total (taxable) income - as a percentage.
Average tax rate
Structural policy
Planned aggregate expenditure (PAE)
Deflation
28. An increase in this would cause an increase in the aggregate supply
Command economic system
Businesses
Labor productivity
Complement
29. When quantity supplied is more than quantity demanded. The formula for excess supply is: Supply - Demand = Excess Supply
Stabilization policies
Standard of living
Excess Supply
Labor productivity
30. Government policies aimed at stabilizing the economy by eliminating output gaps
Stabilization policies
Intermediate Goods
Aggregate supply shock
Corporation
31. Natural Rate of Unemployment - a rate that will always exist
Phillips curve
NRU
Capitalism
Substitution effect
32. Concerned with analyzing whether or not a policy should be used.
Price level
Normative analysis
NRU
Labor productivity
33. When the people believe that the nation's central bank will keep inflation rates low.
Monetarism
Inflation shock
Credibility of monetary policy
Supply-side policy
34. The total planned spending on final goods and services.
Law of Supply
Participation rate
Planned aggregate expenditure (PAE)
Capital goods
35. A free market system that relies on private property ownership and supply and demand
Law of Demand
Capitalism
The quality adjustment bias
Marginal benefit
36. Goods like food and clothing that have a short lifespan.
Planned aggregate expenditure (PAE)
Inflation inertia
Consumer Nondurables
Frictional unemployment
37. 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.
Automatic stabilizers
Quantity equation
Core rate of inflation
decreases increases
38. The relationship between disposable income and spending on consumable goods and services
Real quantity
LRAS
Consumption function
The quality adjustment bias
39. The tendency for nominal interest rates to be high when inflation rates are high and low when inflation rates are low.
Disinflation
Saving
Fisher effect
Labor productivity
40. A macroeconomic policy that directly affects the structure and various institutions of an economy
Market equilibrium
Structural policy
Marginal benefit
Participation rate
41. The time between the need for a macroeconomic policy and its implementation
Price
Automatic stabilizers
Inside lag
Expansionary policies
42. 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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43. The continuing increase in the average level of prices of goods and services over time.
The quality adjustment bias
Cyclical unemployment
Nominal GDP
Inflation
44. The basic assumption of this model is that in the short run - firms meet demand at present price.
Socially optimal quantity
Keynesian model
Expansionary policies
Substitution effect
45. Government policies intended to increase spending and output.
Intangible Assets
Labor unions
Tangible Assets
Expansionary policies
46. The increase in total cost that comes from producing one additional unit of a specific good or service.
Unemployment insurance
Command economic system
Free market
Marginal cost
47. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation
Liquidity
Velocity
Indexing
Frictional unemployment
48. Describes how the economy directly effects the actions policymakers take.
Aggregate Supply
Policy reaction function
Sole proprietorship
Quantity equation
49. That efficiency leads to economic prosperity for all.
The principle of efficiency
AD curve intersects the SAS curve
Planned aggregate expenditure (PAE)
Anchored inflation expectations
50. A result of there only being one buyer of a resource input - good - or service.
Marginal tax rate
Monopsony
Planned aggregate expenditure (PAE)
Normative analysis