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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. According to classical theory - an increase in AD increases the price level but not the level of...
output
progressive tax system
induced expenditure
international prices - international trade agreements - and real GDP in the rest of the world
2. The purchase of foreign goods or services
imports
left
Say's Law
do not
3. A capitalist economy does not tend to employ its resources fully
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4. The magnitude of the multiplier depends on the ___ _____
output
Classical Theory of Employment
LRAS curve
AE curve
5. Changes in real GDP DO or DO NOT change government expenditure.
do not
MPS
supply-side
increases
6. Lists the level of aggregate planned expenditure at each level of real GDP
MPC x (1 - the marginal tax rate)
aggregate expenditure schedule
do not
Classical Theory of Employment
7. Sizes of MPS and multiplier
4 assumptions of Classical Model
at equilibrium expenditure
automatic stabilizers
inverse relationship
8. The time of production during which there are only essentially variable costs
Classical Theory of Employment
leakage
long-run
less
9. The larger the MPC - the ______ the multiplier
aggregate demand
larger
Ricardian Equivalence Theorum
MPC out of real GDP
10. The average tax rate rises with GDP
inverse relationship
multiplier
progressive tax system
recession
11. According to Keynesian theory - this is horizontal
AE curve
SRAS curve
inverse relationship
fiscal policy
12. A change in equilibrium expenditure divided by a change in aggregate expenditure
Ricardian Equivalence Theorum
at equilibrium expenditure
equation to determine a multiplier
fiscal policy
13. An increase in real GDP _________ imports
multiplier
inflation
aggregate expenditure schedule
increases
14. Slope of savings function is equal to...
autonomous expenditure
equation to determine a multiplier
international prices - international trade agreements - and real GDP in the rest of the world
MPS
15. Appropriate changes in government expenditures that occur naturally
inflation
AE curve
aggregate expenditure
automatic stabilizers
16. If the MPC is 0.65 - what is the multiplier?
2.86
equilibrium expenditure
larger
AE curve
17. Changes in real GDP DO or DO NOT change investment plans.
4 assumptions of Classical Model
progressive tax system
do not
disposable income
18. Real GDP - net taxes
expected rate of profit and real interest rate
aggregate expenditure
inflation
disposable income
19. Spending for the production and accumulation of capital goods and additions to inventory
disposable income
investment
do not
do not
20. An increase in government expenditures or a decrease in taxes
progressive tax system
induced expenditure
crowding out effect
expansionary fiscal policy
21. Expansionary fiscal policy would be used to counteract a _________
do not
supply-side
recession
equation to determine a multiplier
22. (1) Pure competition; (2) Flexible wages and prices; (3) Self-interested motives; (4) People cannot be fooled by money illusions
consumption expenditure
Classical Theory of Employment
Keynesian model
4 assumptions of Classical Model
23. The time of production during which there are fixed and variable costs
short-run
imports
aggregate expenditure
expected rate of profit and real interest rate
24. 'Supply creates its own demand.'
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25. Contractionary fiscal policy would be used to counteract _________
inflation
short-run
MPC x (1 - the marginal tax rate)
fiscal policy
26. Opposite of traditional view; supply side effects are dominant
larger
supply-side
expansionary fiscal policy
aggregate expenditure curve
27. Most economic theory is based on this
progressive tax system
at equilibrium expenditure
4 assumptions of Classical Model
Keynesian model
28. Dictates rises and falls in consumption expenditure
induced expenditure
aggregate expenditure schedule
MPC out of real GDP
inverse relationship
29. Made up of autonomous expenditure and induced expenditure
2.86
aggregate expenditure
increases
autonomous expenditure
30. Fiscal Policy changes that increase or decrease equilibrium expenditure will increase or decrease _________ ________.
autonomous expenditure
inflation
fiscal policy
aggregate demand
31. The capitalistic economy would tend to employ its resources fully
Keynesian model
exports
Ricardian Equivalence Theorum
Classical Theory of Employment
32. The part of aggregate planned expenditure that does change when real GDP changes
supply-side
crowding out effect
traditional view of fiscal policy
induced expenditure
33. A deficit that persists during full employment
output
progressive tax system
Keynesian model
structural deficit
34. While investment - government spending - and exports remain constant during changes in the GDP - this kind of expenditure changes with the level of GDP
LRAS curve
autonomous expenditure
consumption expenditure
Say's Law
35. What changes government expenditure
political process
2.86
fiscal policy
at equilibrium expenditure
36. Two factors that influence or change investment plans
disposable income
consumption expenditure
automatic stabilizers
expected rate of profit and real interest rate
37. The part of aggregate planned expenditure that does not change when real GDP changes
autonomous expenditure
investment
larger
progressive tax system
38. C + I + G + N - import function
political process
LRAS curve
aggregate expenditure curve
supply-side
39. Factors that change domestic imports
international prices - international trade agreements - and real GDP in the rest of the world
less
output
contractionary fiscal policy
40. Inventories remain at their target levels when....
traditional view of fiscal policy
at equilibrium expenditure
less
LRAS curve
41. According to classical theory - this is vertical
SRAS curve
induced expenditure
recession
LRAS curve
42. Goods or services produced in a given nation and sold to customers in other nations
2.86
equation of marginal propensity to import
do not
exports
43. Equation for MPC out of real GDP
aggregate expenditure
wages
MPC x (1 - the marginal tax rate)
political process
44. Changes in real GDP DO or DO NOT change domestic exports.
international prices - international trade agreements - and real GDP in the rest of the world
AE curve
inverse relationship
do not
45. A deficit that arises out of a recession
wages
international prices - international trade agreements - and real GDP in the rest of the world
cyclical deficit
Keynesian theory's criticism
46. Savings in circular flow diagram is...
equation to determine a multiplier
at equilibrium expenditure
imports
leakage
47. Demand side effects are large; supply side - small
at equilibrium expenditure
aggregate expenditure
aggregate demand
traditional view of fiscal policy
48. According to classical theory - demand for this creates unemployment
wages
equation to determine a multiplier
SRAS curve
investment
49. The amount by which a change in aggregate expenditure is multiplied to determine the change in equilibrium expenditure and real GDP
do not
multiplier
left
MPS
50. An increase in public debt will have little or no effect on real output or employment because people will choose to save more money
Classical Theory of Employment
equilibrium expenditure
expected rate of profit and real interest rate
Ricardian Equivalence Theorum