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

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2. The value of all goods and services produced anywhere in the world by a nation's citizens during a specified amount of time.






3. 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.






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






5. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally






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






7. 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






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






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






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






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






12. The rate of price increase on all things except food and energy






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






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






15. 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.






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






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.






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






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






20. The real cost of changing a listed price.






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






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






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






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






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






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






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






28. 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






29. 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.






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






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






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






33. The output per employed worker






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






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






36. The price of a good or service in relation to the price of other goods and services.






37. A policy that affects potential output






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






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






40. Used in the production of final goods - but instead of being consumed - are available for reuse.






41. Payments that the government makes to unemployed workers.






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






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






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






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






46. 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).






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






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






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






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