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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. Caused by changes in the overall economy.






2. 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.






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






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






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






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






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






8. The percentage of working-age people within the labor force






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






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






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






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






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






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






15. 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.






16. The labor sector highlights the rate of ____ .






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






18. When the rate of inflation is extremely high.






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






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






21. Money multiplied by velocity equals nominal GDP.






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






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






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






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






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






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






28. The monetary sector focuses on the ________ rate.






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






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






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






32. That efficiency leads to economic prosperity for all.






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






34. 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






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






36. 1 percent more unemployment results in 2 percent less output.

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






38. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.






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






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






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






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






43. Payments that the government makes to unemployed workers.






44. Unicorporated entity that has shared ownership.






45. A policy that affects potential output






46. When an economic unit makes more than it spends






47. 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






48. Total supply of goods and services in an economy






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






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