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






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






3. 1 percent more unemployment results in 2 percent less output.


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






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






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






7. The real cost of changing a listed price.






8. 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






9. Maximum price that a customer is willing to pay for a good






10. The lowest point of the recession






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






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






13. A Scottish man (1723-1790) who is known as the father of modern economics.






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






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






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






17. Represents the governmental tax rate that will best maximize tax revenues.






18. The beginning of a recession






19. Is equal to Consumption + Government Expenditures + Investment + Exports - Imports The market value of all goods and services produced within a nation during a specified amount of time.






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






21. Money multiplied by velocity equals nominal GDP.






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






23. The annual percentage rate of change in price level reflected by price indexes






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






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






26. That efficiency leads to economic prosperity for all.






27. A policy that affects potential output






28. 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.






29. 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.






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






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






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






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






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






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






36. The smallest dollar amount for which a seller would be willing to sell an additional unit - generally equal to marginal cost


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






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






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






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






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






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






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






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






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






46. When the rate of inflation is extremely high.






47. 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.






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






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






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