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Test your basic knowledge |
CLEP Macroeconomics - 3
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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. The rate of price increase on all things except food and energy
Participation rate
Core rate of inflation
Quantity equation
Reservation price
2. The monetary sector focuses on the ________ rate.
Four sectors of the economy
Velocity
Interest
Inflation shock
3. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.
Keynesian model
Capital income
Boom
Mixed market
4. The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.
Corporation
Fractional
Liquidity
Socially optimal quantity
5. 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.
Law of Diminishing Marginal Utility
Sole proprietorship
Pay
Labor unions
6. On a demand curve - the _____ of the item is placed on the vertical axis of the graph.
Four sectors of the economy
Inside lag
Price
Inflationary gap
7. The beginning of a recession
Real employment
The quality adjustment bias
The principle of efficiency
Peak
8. The part of economics study that looks at the operation of a nation's economy as a whole
Sunk cost
Macroeconomics
Socially optimal quantity
Intermediate Goods
9. There is an ___________ ___ when aggregate output is above potential output
Inflationary gap
Peak
The real GDP per person
Law of Diminishing Marginal Utility
10. When the people believe that the nation's central bank will keep inflation rates low.
Law of Demand
Substitution effect
Output gap
Credibility of monetary policy
11. Total supply of goods and services in an economy
Consumer Nondurables
Indexing
Aggregate supply
Sole proprietorship
12. Money multiplied by velocity equals nominal GDP.
Socially optimal quantity
Substitution bias
Aggregate demand
Quantity equation
13. A record of economic increases and decreases over time.
Business cycle
Buyer's surplus
Marginal cost
Structural unemployment
14. The labor sector highlights the rate of ____ .
Structural policy
Laffer curve
Pay
Labor productivity
15. 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.
Total surplus
Boom
Contractionary policies
Short run equilibrium output
16. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available
Rationing
Gross National Product (GNP)
Free market
LRAS
17. 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.
Adam Smith
Equilibrium price
Contractionary policies
Rationing
18. A GDP decline that lasts two-quarters (six months). A period of slow economic growth
Marginal tax rate
Phillips curve
Labor productivity
Recession
19. The annual percentage rate of change in price level reflected by price indexes
Marginal cost
Complement
The principle of efficiency
The rate of inflation
20. Concerned with analyzing whether or not a policy should be used.
Law of Diminishing Marginal Utility
Tangible Assets
Consumption function
Normative analysis
21. The continuing increase in the average level of prices of goods and services over time.
Anchored inflation expectations
Asset
Inflation
Frictional unemployment
22. The total value of goods and services produced in a country valued at current prices.
The quality adjustment bias
Saving
Substitution effect
Nominal GDP
23. The basic assumption of this model is that in the short run - firms meet demand at present price.
The quality adjustment bias
Keynesian model
Worker mobility
Inflation shock
24. When prices fall consistently over time - leading to negative inflation.
The real GDP per person
Deflation
Expansionary policies
Inflation inertia
25. The movement of workers between jobs - companies - and industries
Inflation inertia
Worker mobility
Sole proprietorship
Keynesian model
26. 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.
Economic efficiency
The rate of inflation
Gross Domestic Product (GDP)
Peak
27. 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.
Menu cost
Liquidity
Invisible hand
Law of Demand
28. The total planned spending on final goods and services.
Law of Supply
Planned aggregate expenditure (PAE)
Market equilibrium
Tangible Assets
29. The real cost of changing a listed price.
Gross National Product (GNP)
Contractionary policies
Menu cost
Real employment
30. A free market system that relies on private property ownership and supply and demand
Keynesian economic theory
Real employment
Lorenz curve
Capitalism
31. 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.
Structural unemployment
Command economic system
The Wealth Effect
Planned aggregate expenditure (PAE)
32. 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.
Four sectors of the economy
Inflation shock
Traditional economic system
Partnership
33. The time period between a policy's implementation and its desired effects on an economy.
Outside lag
Inflation shock
Inside lag
Normative analysis
34. The tendency for nominal interest rates to be high when inflation rates are high and low when inflation rates are low.
Fisher effect
The rate of inflation
Core rate of inflation
Marginal benefit
35. Total tax paid divided by total (taxable) income - as a percentage.
Real employment
Average tax rate
Structural unemployment
Sunk cost
36. Payments that the government makes to unemployed workers.
Unemployment insurance
Inflationary gap
Invisible hand
Four sectors of the economy
37. Caused by changes in the overall economy.
Cyclical unemployment
Adam Smith
Law of Supply
Boom
38. An extreme decline in the rate of inflation. Can lead to high levels of unemployment and recessionary gaps.
Disinflation
Adam Smith
Deflation
Pay
39. The increase in total benefit that comes from producing one additional unit.
Marginal benefit
Lorenz curve
Output gap
NRU
40. That efficiency leads to economic prosperity for all.
LRAS
Adam Smith
Intermediate Goods
The principle of efficiency
41. An increase in this would cause an increase in the aggregate supply
Law of Diminishing Marginal Utility
Labor productivity
Structural policy
Anchored inflation expectations
42. Most free-market banking systems are based on __________ reserves.
Keynesian model
Fractional
LRAS
Rationing
43. The ease with which an asset can be converted to currency.
Corporation
Rationing
Liquidity
AD curve intersects the SAS curve
44. Government policies aimed at stabilizing the economy by eliminating output gaps
Stabilization policies
Gross Domestic Product (GDP)
Marginal tax rate
Exchange
45. When both producers and consumers are satisfied with their quantities at market price.
Market equilibrium
Gross Domestic Product (GDP)
Aggregate Supply
Credibility of monetary policy
46. The degree to which people have access to goods and services that make their lives better.
Saving
Real quantity
Standard of living
Capital goods
47. When inflation suddenly deviates from its normal course.
Aggregate supply
Keynesian economic theory
Inflation shock
Trough
48. 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
Labor productivity
Fisher effect
Seller's surplus
49. The time between the need for a macroeconomic policy and its implementation
Traditional economic system
Seller's reservation price
Normative analysis
Inside lag
50. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus
Deflation
Tangible Assets
Total surplus
Pay