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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. A free market system that relies on private property ownership and supply and demand






2. 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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3. 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






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






5. The total value of goods and services produced in a country valued at current prices.






6. Can be found by multiplying the average labor productivity by the percentage of people that are working in the economy.






7. 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.






8. Used in the production of final goods - but instead of being consumed - are available for reuse.






9. A cost that is beyond recovery the moment a consumer decides to purchase a certain good or service is made






10. A law stating that as a person consumes additional units of a good - eventually the utility gained from each additional unit of the good decreases.






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






12. Government policies aimed at stabilizing the economy by eliminating output gaps






13. A record of economic increases and decreases over time.






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






15. Legal entity that has received a charter from a state or federal government.






16. The rise in taxes that occurs when before-tax income increases by one dollar






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






18. 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.






19. Combines pure market and command. Example: Japan






20. The amount of workers that are willing to work for a real wage.






21. (n) something of value; a resource; an advantage






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






23. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.






24. The government office that is responsible for projecting federal surpluses and deficits






25. The output per employed worker






26. The speed that money changes hands in order to buy and sell final goods and services.






27. When economists fail to account for improvements in goods or services and incorrectly report inflation as higher.






28. Total supply of goods and services in an economy






29. The price at which the number of products that businesses are willing to supply equals the amount of products that consumers are willing to buy at a specific point in time.






30. 1 percent more unemployment results in 2 percent less output.

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31. Government policies intended to increase spending and output.






32. When goods and services are made and consumed at the best levels for the society. Nothing more can be acheived with the resources available.






33. 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






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






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






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






37. Natural Rate of Unemployment - a rate that will always exist






38. Economies based on capitalism have microeconomic instability and that government is required to properly stabilize the economy.






39. The maximum amount that an economy can output over a period of time






40. When people's expectations of future inflation do not change even though inflation rates change.






41. Goods that are used in the production of final goods.






42. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation






43. The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.






44. The total planned spending on final goods and services.






45. When inflation suddenly deviates from its normal course.






46. A quantity that is measured in real terms - the actual quantity of a good or service






47. Goods like food and clothing that have a short lifespan.






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






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






50. There is an ___________ ___ when aggregate output is above potential output