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Test your basic knowledge |
CLEP Macroeconomics - 3
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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. Gross domestic product adjusted for inflation; gross domestic product in a year divided by the GDP price index for that year - the index expressed as a decimal
Real GDP
Output gap
Deflation
Okun's Law
2. Total supply of goods and services in an economy
Unemployment insurance
Labor productivity
Aggregate supply
Labor productivity
3. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.
Stabilization policies
Recession
Price level
Substitution effect
4. The increase in total benefit that comes from producing one additional unit.
Marginal benefit
Short run equilibrium output
Excess Supply
Intermediate Goods
5. The basic assumption of this model is that in the short run - firms meet demand at present price.
Consumer Nondurables
Keynesian model
Sole proprietorship
Inflation inertia
6. The percentage of working-age people within the labor force
Participation rate
Supply-side policy
Lorenz curve
Sole proprietorship
7. Describes how the economy directly effects the actions policymakers take.
Adam Smith
Policy reaction function
Deflation
Core rate of inflation
8. The goods and services sector focuses largely on the level of ______ .
Supply-side policy
Aggregation
Tangible Assets
Income
9. When quantity supplied is more than quantity demanded. The formula for excess supply is: Supply - Demand = Excess Supply
Law of Demand
Excess Supply
Monetarism
Anchored inflation expectations
10. A large - unexpected change in the cost of resources.
Aggregate supply shock
Interest
Socially optimal quantity
Monopsony
11. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation
Total surplus
Macroeconomics
Cyclical unemployment
Indexing
12. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
decreases increases
Complement
Pay
Trough
13. The part of economics study that looks at the operation of a nation's economy as a whole
LRAS
Macroeconomics
Mixed market
Autonomous Expenditure
14. The relationship between disposable income and spending on consumable goods and services
Policy reaction function
Consumption function
Expansionary policies
Asset
15. The maximum amount that an economy can output over a period of time
Structural unemployment
Fisher effect
LRAS
Potential output
16. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus
Deflation
Total surplus
Quantity equation
Anchored inflation expectations
17. 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
Mixed market
Consumption function
Menu cost
18. Government policies intended to increase spending and output.
Expansionary policies
Capital goods
The principle of efficiency
Fisher effect
19. The ease with which an asset can be converted to currency.
Liquidity
Asset
Partnership
Four sectors of the economy
20. The increase in total cost that comes from producing one additional unit of a specific good or service.
Law of Demand
Marginal cost
Recession
Potential output
21. When goods and services are made and consumed at the best levels for the society. Nothing more can be acheived with the resources available.
Indexing
Economic efficiency
The quality adjustment bias
Partnership
22. Legal entity that has received a charter from a state or federal government.
Average tax rate
Corporation
Monetarism
Worker mobility
23. Goods and services sector - Labor sector - monetary sector - international sector.
Real GDP
Mixed market
Four sectors of the economy
decreases increases
24. A law stating that as the price of a product increases the demand of that product decreases - while if the price of a product decreases the demand for that product increases.
Output gap
Intangible Assets
Law of Demand
Inflation
25. The annual percentage rate of change in price level reflected by price indexes
Real employment
Aggregate Supply
The rate of inflation
Capitalism
26. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.
Nominal GDP
Indexing
Capital income
Planned aggregate expenditure (PAE)
27. The speed that money changes hands in order to buy and sell final goods and services.
Velocity
Aggregate supply shock
Peak
Deflation
28. The rate of price increase on all things except food and energy
Core rate of inflation
Capital goods
Peak
Asset
29. The value of all goods and services produced anywhere in the world by a nation's citizens during a specified amount of time.
Substitution effect
Economic efficiency
Law of Supply
Gross National Product (GNP)
30. 1 percent more unemployment results in 2 percent less output.
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31. Total tax paid divided by total (taxable) income - as a percentage.
Average tax rate
Deflation
Traditional economic system
Substitution bias
32. (n) something of value; a resource; an advantage
Potential output
Asset
Aggregate supply
Participation rate
33. Extreme economic growth
Law of Demand
Sunk cost
Boom
Consumer Nondurables
34. A cost that is beyond recovery the moment a consumer decides to purchase a certain good or service is made
Sunk cost
Disinflation
Lorenz curve
Corporation
35. Money multiplied by velocity equals nominal GDP.
Sole proprietorship
The quality adjustment bias
Quantity equation
Outside lag
36. When there is no cyclical unemployment and every person who wishes to work is able to find a job at the prevailing rate for wages and in the prevailing working conditions.
Law of Supply
decreases increases
Aggregate supply shock
Real employment
37. There is an ___________ ___ when aggregate output is above potential output
Inflationary gap
Indexing
Lorenz curve
Marginal tax rate
38. 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.
Market equilibrium
Standard of living
Automatic stabilizers
Short run equilibrium output
39. Organizations that act as moderators between employers and employees
Stabilization policies
Substitution effect
The quality adjustment bias
Labor unions
40. The total value of goods and services produced in a country valued at current prices.
Structural policy
Nominal GDP
Adam Smith
Real employment
41. The beginning of a recession
Peak
Congressional budget office
Market equilibrium
Aggregate Supply
42. 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
Monetarism
Gross Domestic Product (GDP)
Relative price
Supply-side policy
43. A phrase coined by Adam Smith to describe the process that turns self directed gain into social and economic benefits for all.
Invisible hand
Worker mobility
Keynesian economic theory
Cyclical unemployment
44. The amount spent by a household on goods and services such as: entertainment - food - and other perishables.
Consumption
Labor supply
Corporation
Intermediate goods
45. When an economic unit makes more than it spends
Velocity
Fisher effect
Short run equilibrium output
Saving
46. The continuing increase in the average level of prices of goods and services over time.
Automatic stabilizers
Anchored inflation expectations
Inflation
Asset
47. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available
The Wealth Effect
Lorenz curve
Rationing
Capitalism
48. An increase in spending due to a perceived increase in wealth.
Quantity equation
Asset
Equilibrium price
The Wealth Effect
49. A GDP decline that lasts two-quarters (six months). A period of slow economic growth
Recession
The rate of inflation
Fractional
Gross Domestic Product (GDP)
50. Business entity which legally has no separate existence from its owner.
Credibility of monetary policy
Business cycle
Laffer curve
Sole proprietorship