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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 prices fall consistently over time - leading to negative inflation.






2. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available






3. The lowest point of the recession






4. 1 percent more unemployment results in 2 percent less output.


5. A measure of overall price levels at a specific point in the price index.






6. The labor sector highlights the rate of ____ .






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






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


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






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






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






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






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






14. 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.






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






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






17. 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.






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






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






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






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






22. Payments that the government makes to unemployed workers.






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






24. Unicorporated entity that has shared ownership.






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






26. The annual percentage rate of change in price level reflected by price indexes






27. 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






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






29. 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.






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






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






32. Caused by changes in the overall economy.






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






34. When the rate of inflation is extremely high.






35. That efficiency leads to economic prosperity for all.






36. 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.






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






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






39. The ease with which an asset can be converted to currency.






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






41. 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).






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






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






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






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






46. 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.






47. 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






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






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






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