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