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Test your basic knowledge |
CLEP Macroeconomics: Measurement Of Economic Performance - 2
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. Sizes of MPS and multiplier
do not
output
international prices - international trade agreements - and real GDP in the rest of the world
inverse relationship
2. The level of aggregate expenditure when aggregate planned expenditure equals real GDP
investment
larger
equation of marginal propensity to import
equilibrium expenditure
3. 'Supply creates its own demand.'
4. (1) Pure competition; (2) Flexible wages and prices; (3) Self-interested motives; (4) People cannot be fooled by money illusions
4 assumptions of Classical Model
leakage
Say's Law
contractionary fiscal policy
5. If the MPC is 0.65 - what is the multiplier?
disposable income
less
2.86
left
6. The capitalistic economy would tend to employ its resources fully
leakage
left
Classical Theory of Employment
multiplier
7. Change in imports divided by the change in real GDP
MPS
equation of marginal propensity to import
supply-side
do not
8. According to classical theory - demand for this creates unemployment
equation to determine a multiplier
Keynesian model
wages
do not
9. A deficit that arises out of a recession
consumption expenditure
Ricardian Equivalence Theorum
long-run
cyclical deficit
10. The larger the MPC - the ______ the multiplier
larger
Say's Law
at equilibrium expenditure
exports
11. The amount by which a change in aggregate expenditure is multiplied to determine the change in equilibrium expenditure and real GDP
multiplier
wages
increases
aggregate expenditure
12. Demand side effects are large; supply side - small
traditional view of fiscal policy
consumption expenditure
aggregate expenditure
aggregate expenditure curve
13. According to classical theory - an increase in AD increases the price level but not the level of...
expansionary fiscal policy
output
aggregate expenditure curve
multiplier
14. Contractionary fiscal policy would be used to counteract _________
political process
inflation
do not
equilibrium expenditure
15. According to classical theory - this is vertical
4 assumptions of Classical Model
larger
LRAS curve
MPC out of real GDP
16. Appropriate changes in government expenditures that occur naturally
leakage
disposable income
automatic stabilizers
inflation
17. When a fiscal expansion occurs at Potential GDP the Short-Run Aggregate Supply curve (SAS) shifts _____.
short-run
fiscal policy
left
long-run
18. An increase in real GDP _________ imports
increases
Classical Theory of Employment
do not
automatic stabilizers
19. Equation for MPC out of real GDP
induced expenditure
AE curve
international prices - international trade agreements - and real GDP in the rest of the world
MPC x (1 - the marginal tax rate)
20. A deficit that persists during full employment
aggregate demand
leakage
structural deficit
equilibrium expenditure
21. The time of production during which there are only essentially variable costs
Say's Law
output
long-run
Keynesian theory's criticism
22. The government's attempt to influence the economy by setting and changing taxes - transfer payments - and expenditures on goods and services
fiscal policy
cyclical deficit
output
4 assumptions of Classical Model
23. Inventories remain at their target levels when....
Keynesian theory's criticism
at equilibrium expenditure
larger
Ricardian Equivalence Theorum
24. Fiscal Policy changes that increase or decrease equilibrium expenditure will increase or decrease _________ ________.
expansionary fiscal policy
do not
aggregate demand
inverse relationship
25. Opposite of traditional view; supply side effects are dominant
do not
investment
supply-side
equilibrium expenditure
26. Expansionary fiscal policy would be used to counteract a _________
aggregate expenditure schedule
Say's Law
recession
increases
27. Factors that change domestic imports
2.86
international prices - international trade agreements - and real GDP in the rest of the world
traditional view of fiscal policy
4 assumptions of Classical Model
28. The part of aggregate planned expenditure that does change when real GDP changes
induced expenditure
inflation
fiscal policy
larger
29. What changes government expenditure
automatic stabilizers
cyclical deficit
equilibrium expenditure
political process
30. A capitalist economy does not tend to employ its resources fully
31. The part of aggregate planned expenditure that does not change when real GDP changes
equilibrium expenditure
aggregate demand
autonomous expenditure
international prices - international trade agreements - and real GDP in the rest of the world
32. Changes in real GDP DO or DO NOT change investment plans.
contractionary fiscal policy
SRAS curve
do not
Ricardian Equivalence Theorum
33. The purchase of foreign goods or services
LRAS curve
MPS
imports
do not
34. Lists the level of aggregate planned expenditure at each level of real GDP
inverse relationship
aggregate expenditure schedule
progressive tax system
leakage
35. Goods or services produced in a given nation and sold to customers in other nations
structural deficit
less
exports
traditional view of fiscal policy
36. Two factors that influence or change investment plans
left
aggregate expenditure
expected rate of profit and real interest rate
crowding out effect
37. Claims that expansionary fiscal policy will increase interest rates and reduce investment
expansionary fiscal policy
inflation
crowding out effect
expected rate of profit and real interest rate
38. Changes in real GDP DO or DO NOT change domestic exports.
equilibrium expenditure
expansionary fiscal policy
do not
SRAS curve
39. Slope of savings function is equal to...
at equilibrium expenditure
MPS
left
equation of marginal propensity to import
40. Changes in real GDP DO or DO NOT change government expenditure.
autonomous expenditure
automatic stabilizers
do not
inflation
41. While investment - government spending - and exports remain constant during changes in the GDP - this kind of expenditure changes with the level of GDP
traditional view of fiscal policy
expected rate of profit and real interest rate
do not
consumption expenditure
42. The time of production during which there are fixed and variable costs
consumption expenditure
recession
short-run
expected rate of profit and real interest rate
43. Spending for the production and accumulation of capital goods and additions to inventory
investment
contractionary fiscal policy
2.86
expected rate of profit and real interest rate
44. Dictates rises and falls in consumption expenditure
less
long-run
equation to determine a multiplier
MPC out of real GDP
45. A decrease in government expenditures or an increase in taxes
do not
structural deficit
inflation
contractionary fiscal policy
46. Real GDP - net taxes
Keynesian model
wages
disposable income
progressive tax system
47. Made up of autonomous expenditure and induced expenditure
aggregate expenditure schedule
MPS
aggregate expenditure
do not
48. C + I + G + N - import function
aggregate expenditure curve
supply-side
Say's Law
do not
49. As real GDP increases - disposable income increases - but by ___ than the increase in real GDP because net taxes also increase.
multiplier
aggregate expenditure schedule
less
SRAS curve
50. Most economic theory is based on this
aggregate demand
MPC x (1 - the marginal tax rate)
equilibrium expenditure
Keynesian model