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CLEP Macroeconomics: Measurement Of Economic Performance - 2

Subjects : clep, economics
  • Answer 50 questions in 15 minutes.
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  • Match each statement with the correct term.
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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. Demand side effects are large; supply side - small

2. According to classical theory - this is vertical

3. Changes in real GDP DO or DO NOT change government expenditure.

4. A deficit that persists during full employment

5. Spending for the production and accumulation of capital goods and additions to inventory

6. An increase in government expenditures or a decrease in taxes

7. The amount by which a change in aggregate expenditure is multiplied to determine the change in equilibrium expenditure and real GDP

8. (1) Pure competition; (2) Flexible wages and prices; (3) Self-interested motives; (4) People cannot be fooled by money illusions

9. When a fiscal expansion occurs at Potential GDP the Short-Run Aggregate Supply curve (SAS) shifts _____.

10. The larger the MPC - the ______ the multiplier

11. A decrease in government expenditures or an increase in taxes

12. According to classical theory - an increase in AD increases the price level but not the level of...

13. 'Supply creates its own demand.'

14. Goods or services produced in a given nation and sold to customers in other nations

15. As real GDP increases - disposable income increases - but by ___ than the increase in real GDP because net taxes also increase.

16. The time of production during which there are fixed and variable costs

17. Appropriate changes in government expenditures that occur naturally

18. Contractionary fiscal policy would be used to counteract _________

19. The purchase of foreign goods or services

20. A deficit that arises out of a recession

21. Expansionary fiscal policy would be used to counteract a _________

22. An increase in public debt will have little or no effect on real output or employment because people will choose to save more money

23. Real GDP - net taxes

24. The level of aggregate expenditure when aggregate planned expenditure equals real GDP

25. Inventories remain at their target levels when....

26. Equation for MPC out of real GDP

27. Change in imports divided by the change in real GDP

28. Changes in real GDP DO or DO NOT change investment plans.

29. The part of aggregate planned expenditure that does not change when real GDP changes

30. The time of production during which there are only essentially variable costs

31. Most economic theory is based on this

32. The government's attempt to influence the economy by setting and changing taxes - transfer payments - and expenditures on goods and services

33. The part of aggregate planned expenditure that does change when real GDP changes

34. While investment - government spending - and exports remain constant during changes in the GDP - this kind of expenditure changes with the level of GDP

35. Changes in real GDP DO or DO NOT change domestic exports.

36. The average tax rate rises with GDP

37. Factors that change domestic imports

38. Slope of savings function is equal to...

39. The capitalistic economy would tend to employ its resources fully

40. Two factors that influence or change investment plans

41. Claims that expansionary fiscal policy will increase interest rates and reduce investment

42. C + I + G + N - import function

43. Opposite of traditional view; supply side effects are dominant

44. Made up of autonomous expenditure and induced expenditure

45. A change in equilibrium expenditure divided by a change in aggregate expenditure

46. Fiscal Policy changes that increase or decrease equilibrium expenditure will increase or decrease _________ ________.

47. If the MPC is 0.65 - what is the multiplier?

48. The magnitude of the multiplier depends on the ___ _____

49. According to Keynesian theory - this is horizontal

50. Lists the level of aggregate planned expenditure at each level of real GDP