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