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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. The level of output where output equals planned aggregate expenditure






2. The output per employed worker






3. 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).






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






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






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






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






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






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






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






11. Goods not counted in the nation's GDP.






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

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






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






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






16. 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.






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






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






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






20. 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.






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






22. When an economic unit makes more than it spends






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






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






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






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






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






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






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






31. A policy that affects potential output






32. The beginning of a recession






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






34. 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.






35. That efficiency leads to economic prosperity for all.






36. 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.






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






38. 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.






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






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






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






42. Total supply of goods and services in an economy






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






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






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






46. Business entity which legally has no separate existence from its owner.






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






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






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






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