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