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Test your basic knowledge |
CLEP Macroeconomics - 3
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Study First
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 annual percentage rate of change in price level reflected by price indexes
The rate of inflation
decreases increases
Potential output
Free market
2. Goods and services sector - Labor sector - monetary sector - international sector.
Four sectors of the economy
Phillips curve
Income
Consumption
3. 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.
Contractionary policies
Gross National Product (GNP)
Law of Diminishing Marginal Utility
Capital income
4. Used in the production of final goods - but instead of being consumed - are available for reuse.
Keynesian economic theory
Trough
Mixed market
Capital goods
5. Sole proprietorships - partnerships - and corporations are private producing units of the economy knows as __________.
Gross National Product (GNP)
Businesses
Frictional unemployment
Seller's surplus
6. When economists fail to account for improvements in goods or services and incorrectly report inflation as higher.
Quantity equation
Income
Aggregation
The quality adjustment bias
7. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally
Anchored inflation expectations
Real employment
Structural unemployment
Aggregate Supply
8. Concerned with analyzing whether or not a policy should be used.
Exchange
Labor unions
Normative analysis
Labor productivity
9. Combines pure market and command. Example: Japan
Aggregate Supply
Consumption function
Mixed market
Worker mobility
10. Money multiplied by velocity equals nominal GDP.
Price
Autonomous Expenditure
Quantity equation
Stabilization policies
11. The time between the need for a macroeconomic policy and its implementation
Marginal benefit
Equilibrium price
Inside lag
Contractionary policies
12. The amount of workers that are willing to work for a real wage.
Boom
Partnership
Tangible Assets
Labor supply
13. The degree to which people have access to goods and services that make their lives better.
Planned aggregate expenditure (PAE)
Free market
Substitution effect
Standard of living
14. The increase in total cost that comes from producing one additional unit of a specific good or service.
Rationing
Marginal cost
Potential output
Disinflation
15. Demonstrates that there is an inverse relationship between inflation and unemployment; as inflation increases - unemployment decreases (and vice versa).
Stabilization policies
Business cycle
Seller's surplus
Phillips curve
16. The adding up of individual economic variables to obtain a large - general picture of the economy.
Recession
Fisher effect
Aggregation
Policy reaction function
17. 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).
Standard of living
Frictional unemployment
Average tax rate
Aggregation
18. Patents - Goodwill - and Trademarks (lack physical substance)
Reservation price
Aggregate Supply
Intangible Assets
Liquidity
19. The lowest point of the recession
Average tax rate
Keynesian model
Trough
Law of Demand
20. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available
Reservation price
The rate of inflation
Rationing
Interest
21. The maximum amount that an economy can output over a period of time
Potential output
Inside lag
Real employment
Okun's Law
22. A phrase coined by Adam Smith to describe the process that turns self directed gain into social and economic benefits for all.
Market equilibrium
Recession
Invisible hand
Worker mobility
23. The continuing increase in the average level of prices of goods and services over time.
Outside lag
Aggregate Supply
Structural policy
Inflation
24. (n) something of value; a resource; an advantage
Tangible Assets
Asset
Lorenz curve
Invisible hand
25. 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
Outside lag
Law of Demand
Boom
Real GDP
26. A difference between the potential output (potential GDP) of an economy and its actual output (actual GDP)
Output gap
Structural policy
Autonomous Expenditure
Price level
27. An extreme decline in the rate of inflation. Can lead to high levels of unemployment and recessionary gaps.
Real employment
Supply-side policy
Disinflation
Credibility of monetary policy
28. Represents the governmental tax rate that will best maximize tax revenues.
The principle of efficiency
Substitution effect
Monetarism
Laffer curve
29. A macroeconomic policy that directly affects the structure and various institutions of an economy
Consumer Nondurables
Structural policy
Trough
Core rate of inflation
30. A market with unrestricted trading of goods - where the prices of goods are determined by supply and demand.
Free market
Congressional budget office
Asset
Labor supply
31. Unicorporated entity that has shared ownership.
Partnership
Policy reaction function
Frictional unemployment
Fisher effect
32. A record of economic increases and decreases over time.
Inside lag
Mixed market
Business cycle
Asset
33. Total supply of goods and services in an economy
Credibility of monetary policy
Outside lag
Aggregate supply
Macroeconomics
34. The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.
Policy reaction function
Socially optimal quantity
Capitalism
Price level
35. Long Run Aggregate Supply - The natural level of GDP - shown vertical on a graph. When LRAS shifts - SRAS (Short Run Aggregate Supply) will follow .
Okun's Law
LRAS
Real employment
Fisher effect
36. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.
Quantity equation
Corporation
Inflationary gap
Complement
37. Natural Rate of Unemployment - a rate that will always exist
Aggregate supply shock
Phillips curve
Inside lag
NRU
38. Measures the ability of an economy to produce (output) goods and services in the short-term and the long-term.
Seller's surplus
Stabilization policies
Seller's reservation price
Aggregate Supply
39. The increase in total benefit that comes from producing one additional unit.
Credibility of monetary policy
Marginal benefit
Aggregate demand
Aggregate supply shock
40. The difference between a buyer's reservation price (the price they want to pay) and the actual price paid for a good or service
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41. 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.
Total surplus
Real employment
Unemployment insurance
Sole proprietorship
42. The total demand for a country's output. It includes demands for consumption - investment - government purchases - and net exports.
Phillips curve
Aggregate demand
Fractional
Velocity
43. 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.
Supply-side policy
Automatic stabilizers
Price level
Relative price
44. 1 percent more unemployment results in 2 percent less output.
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45. The real cost of changing a listed price.
Menu cost
Complement
Supply-side policy
The rate of inflation
46. A free market system that relies on private property ownership and supply and demand
Businesses
The Wealth Effect
Capitalism
Aggregate supply
47. There is an ___________ ___ when aggregate output is above potential output
The principle of efficiency
Law of Supply
Corporation
Inflationary gap
48. Most free-market banking systems are based on __________ reserves.
Consumption
Monetarism
Substitution bias
Fractional
49. Government policies intended to increase spending and output.
Expansionary policies
Labor productivity
Labor supply
Boom
50. 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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