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






2. The real cost of changing a listed price.






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






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






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






6. When inflation suddenly deviates from its normal course.






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






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






9. Used to demonstrate shifts in income distribution among a population over time.






10. The portion of planned aggregate expenditure that is not based on output






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






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






13. The goods and services sector focuses largely on the level of ______ .






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






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






16. 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.






17. A difference between the potential output (potential GDP) of an economy and its actual output (actual GDP)






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






19. Goods and services sector - Labor sector - monetary sector - international sector.






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






21. The adding up of individual economic variables to obtain a large - general picture of the economy.






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






23. The international sector emphasizes the ________ rate.






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






25. Money multiplied by velocity equals nominal GDP.






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






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






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






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






30. A macroeconomic policy that directly affects the structure and various institutions of an economy






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






32. Caused by changes in the overall economy.






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






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






35. Unicorporated entity that has shared ownership.






36. Measures the ability of an economy to produce (output) goods and services in the short-term and the long-term.






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






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






39. 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.






40. Maximum price that a customer is willing to pay for a good






41. The lowest point of the recession






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






43. The amount spent by a household on goods and services such as: entertainment - food - and other perishables.






44. A market with unrestricted trading of goods - where the prices of goods are determined by supply and demand.






45. The beginning of a recession






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






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






48. When the people believe that the nation's central bank will keep inflation rates low.






49. The basic assumption of this model is that in the short run - firms meet demand at present price.






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