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