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Test your basic knowledge |
CLEP Macroeconomics - 3
Start Test
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. 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.
Law of Supply
Seller's reservation price
Gross Domestic Product (GDP)
Command economic system
2. 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
Capital goods
Labor unions
Keynesian economic theory
Real GDP
3. The maximum amount that an economy can output over a period of time
Potential output
Partnership
Velocity
Outside lag
4. 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.
The rate of inflation
Business cycle
Asset
Automatic stabilizers
5. The time between the need for a macroeconomic policy and its implementation
Inside lag
Monetarism
Consumption function
Seller's surplus
6. 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.
Tangible Assets
Worker mobility
Real employment
Boom
7. The part of economics study that looks at the operation of a nation's economy as a whole
Pay
Participation rate
Macroeconomics
Labor productivity
8. 1 percent more unemployment results in 2 percent less output.
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9. Total tax paid divided by total (taxable) income - as a percentage.
Intangible Assets
Seller's reservation price
Average tax rate
Mixed market
10. The lowest point of the recession
Consumption function
Trough
decreases increases
Market equilibrium
11. On a demand curve - the _____ of the item is placed on the vertical axis of the graph.
Price
Real employment
Autonomous Expenditure
AD curve intersects the SAS curve
12. The tendency for nominal interest rates to be high when inflation rates are high and low when inflation rates are low.
Gross Domestic Product (GDP)
Fisher effect
Labor productivity
Okun's Law
13. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.
NRU
Structural policy
Relative price
Substitution effect
14. Goods that are used in the production of final goods.
Aggregate supply
Intermediate goods
Economic efficiency
Interest
15. When inflation suddenly deviates from its normal course.
Inflation shock
Recession
Inside lag
Economic efficiency
16. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus
Total surplus
Monopsony
Hyperinflation
Keynesian economic theory
17. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally
Structural unemployment
The real GDP per person
Phillips curve
Consumer Nondurables
18. 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
Seller's reservation price
Cyclical unemployment
Substitution bias
Law of Supply
19. Government policies aimed at stabilizing the economy by eliminating output gaps
Okun's Law
Stabilization policies
Labor supply
Reservation price
20. Caused by changes in the overall economy.
Cyclical unemployment
Sole proprietorship
Deflation
Gross National Product (GNP)
21. When economists fail to account for improvements in goods or services and incorrectly report inflation as higher.
The quality adjustment bias
Stabilization policies
Contractionary policies
Cyclical unemployment
22. Most free-market banking systems are based on __________ reserves.
Fractional
Average tax rate
Inside lag
The real GDP per person
23. Sole proprietorships - partnerships - and corporations are private producing units of the economy knows as __________.
Businesses
Structural unemployment
Aggregate supply shock
Relative price
24. A result of there only being one buyer of a resource input - good - or service.
Unemployment insurance
Policy reaction function
Phillips curve
Monopsony
25. 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).
Saving
Frictional unemployment
Corporation
Indexing
26. Describes how the economy directly effects the actions policymakers take.
Real employment
Stabilization policies
Adam Smith
Policy reaction function
27. Real Estate - Equipment - and Cash (physical assets)
Rationing
Output gap
Inflation inertia
Tangible Assets
28. 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.
Law of Diminishing Marginal Utility
Nominal GDP
Inside lag
Supply-side policy
29. When both producers and consumers are satisfied with their quantities at market price.
The real GDP per person
Market equilibrium
Keynesian model
Worker mobility
30. 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
Capital income
Law of Demand
LRAS
Monetarism
31. When people's expectations of future inflation do not change even though inflation rates change.
Anchored inflation expectations
Keynesian economic theory
Nominal GDP
Standard of living
32. A difference between the potential output (potential GDP) of an economy and its actual output (actual GDP)
Adam Smith
Traditional economic system
LRAS
Output gap
33. Combines pure market and command. Example: Japan
Autonomous Expenditure
Normative analysis
Monetarism
Mixed market
34. The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.
Planned aggregate expenditure (PAE)
Socially optimal quantity
Labor productivity
Sole proprietorship
35. The rate of price increase on all things except food and energy
The real GDP per person
Fractional
Free market
Core rate of inflation
36. The increase in total cost that comes from producing one additional unit of a specific good or service.
Potential output
Saving
Marginal cost
decreases increases
37. The basic assumption of this model is that in the short run - firms meet demand at present price.
Keynesian model
Law of Demand
Gross Domestic Product (GDP)
Anchored inflation expectations
38. A record of economic increases and decreases over time.
Phillips curve
Total surplus
Business cycle
Marginal tax rate
39. A cost that is beyond recovery the moment a consumer decides to purchase a certain good or service is made
Labor productivity
The quality adjustment bias
Sunk cost
Marginal benefit
40. The relationship between disposable income and spending on consumable goods and services
Law of Demand
Seller's reservation price
Consumption function
Consumption
41. The portion of planned aggregate expenditure that is not based on output
Aggregation
Gross National Product (GNP)
Structural unemployment
Autonomous Expenditure
42. The continuing increase in the average level of prices of goods and services over time.
Inflation
NRU
Monopsony
Real quantity
43. The total demand for a country's output. It includes demands for consumption - investment - government purchases - and net exports.
Complement
Aggregate demand
Inflationary gap
Law of Demand
44. The percentage of working-age people within the labor force
Congressional budget office
Participation rate
Asset
Rationing
45. Payments that the government makes to unemployed workers.
Unemployment insurance
Deflation
Structural policy
Sole proprietorship
46. When prices fall consistently over time - leading to negative inflation.
Businesses
Buyer's surplus
Total surplus
Deflation
47. Goods like food and clothing that have a short lifespan.
Aggregate demand
Consumer Nondurables
Core rate of inflation
Marginal tax rate
48. Long Run Aggregate Supply - The natural level of GDP - shown vertical on a graph. When LRAS shifts - SRAS (Short Run Aggregate Supply) will follow .
Gross National Product (GNP)
LRAS
Velocity
Partnership
49. Measures the ability of an economy to produce (output) goods and services in the short-term and the long-term.
The principle of efficiency
Substitution effect
NRU
Aggregate Supply
50. Represents the governmental tax rate that will best maximize tax revenues.
The real GDP per person
Business cycle
Laffer curve
Consumption function