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






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






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






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






5. When an economic unit makes more than it spends






6. Money multiplied by velocity equals nominal GDP.






7. Most free-market banking systems are based on __________ reserves.






8. That efficiency leads to economic prosperity for all.






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






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






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






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






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






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






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






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






17. The ease with which an asset can be converted to currency.






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






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






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






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






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






23. The real cost of changing a listed price.






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






25. Measures the ability of an economy to produce (output) goods and services in the short-term and the long-term.






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






27. 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.






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






29. A law stating that as the price of a product increases the demand of that product decreases - while if the price of a product decreases the demand for that product increases.






30. Combines pure market and command. Example: Japan






31. Extreme economic growth






32. 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






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






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






35. 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






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






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






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






39. Government policies intended to increase spending and output.






40. Goods like food and clothing that have a short lifespan.






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






42. Total tax paid divided by total (taxable) income - as a percentage.






43. The monetary sector focuses on the ________ rate.






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






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






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






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






48. The output per employed worker






49. 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.






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