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






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






3. 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.






4. A policy that affects potential output






5. 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.






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






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






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






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






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






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






12. Extreme economic growth






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






14. Most free-market banking systems are based on __________ reserves.






15. Organizations that act as moderators between employers and employees






16. A large - unexpected change in the cost of resources.






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






18. 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.






19. 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






20. The difference between the price received by the seller and the seller's reservation price






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






22. Is equal to Consumption + Government Expenditures + Investment + Exports - Imports The market value of all goods and services produced within a nation during a specified amount of time.






23. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.






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






25. When inflation suddenly deviates from its normal course.






26. That efficiency leads to economic prosperity for all.






27. 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.






28. 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).






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






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






31. 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






32. Government policies intended to increase spending and output.






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






34. The time between the need for a macroeconomic policy and its implementation






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






36. 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.






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






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






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






40. The increase in total benefit that comes from producing one additional unit.






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






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






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






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






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






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






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






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






49. 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.






50. When quantity supplied is more than quantity demanded. The formula for excess supply is: Supply - Demand = Excess Supply