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CLEP Macroeconomics - 3

Subjects : clep, economics
  • Answer 50 questions in 15 minutes.
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  • Match each statement with the correct term.
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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. An increase in this would cause an increase in the aggregate supply

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

3. The difference between a buyer's reservation price (the price they want to pay) and the actual price paid for a good or service

4. A policy that affects potential output

5. 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

6. 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.

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

8. An increase in spending due to a perceived increase in wealth.

9. The degree to which people have access to goods and services that make their lives better.

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

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

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

13. Patents - Goodwill - and Trademarks (lack physical substance)

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

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

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

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

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

19. Sole proprietorships - partnerships - and corporations are private producing units of the economy knows as __________.

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

21. A quantity that is measured in real terms - the actual quantity of a good or service

22. Combines pure market and command. Example: Japan

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

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

25. The continuing increase in the average level of prices of goods and services over time.

26. 1 percent more unemployment results in 2 percent less output.

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

28. 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).

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

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

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

32. 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.

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

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

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

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

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

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

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

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

41. Extreme economic growth

42. 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.

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

44. The increase in total cost that comes from producing one additional unit of a specific good or service.

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

46. 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.

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

48. 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.

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

50. 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.