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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 goods and services are made and consumed at the best levels for the society. Nothing more can be acheived with the resources available.






2. 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.






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






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






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






6. The beginning of a recession






7. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus






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






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






10. A policy that affects potential output






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






12. When the rate of inflation is extremely high.






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






14. 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.






15. The output per employed worker






16. The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.






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






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






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






20. Government policies intended to increase spending and output.






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






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






23. Combines pure market and command. Example: Japan






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






25. A result of there only being one buyer of a resource input - good - or service.






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






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






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






29. The real cost of changing a listed price.






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






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






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






33. 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






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






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






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






37. 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.






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






39. A phrase coined by Adam Smith to describe the process that turns self directed gain into social and economic benefits for all.






40. Total supply of goods and services in an economy






41. 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.






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






43. Organizations that act as moderators between employers and employees






44. Extreme economic growth






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






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






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






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






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






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