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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. 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.






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






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






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.






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






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.






7. The part of economics study that looks at the operation of a nation's economy as a whole






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.






10. The lowest point of the recession






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






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






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






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






15. When inflation suddenly deviates from its normal course.






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






17. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally






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






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






20. Caused by changes in the overall economy.






21. When economists fail to account for improvements in goods or services and incorrectly report inflation as higher.






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






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






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






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).






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






27. Real Estate - Equipment - and Cash (physical 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.






29. When both producers and consumers are satisfied with their quantities at market price.






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






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






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






33. Combines pure market and command. Example: Japan






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






35. The rate of price increase on all things except food and energy






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






37. The basic assumption of this model is that in the short run - firms meet demand at present price.






38. A record of economic increases and decreases over time.






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






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






41. The portion of planned aggregate expenditure that is not based on output






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






43. The total demand for a country's output. It includes demands for consumption - investment - government purchases - and net exports.






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






45. Payments that the government makes to unemployed workers.






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






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






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 .






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






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