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CLEP Macroeconomics: Measurement Of Economic Performance - 2

Subjects : clep, economics
  • Answer 50 questions in 15 minutes.
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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. The magnitude of the multiplier depends on the ___ _____

2. According to classical theory - this is vertical

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

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

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

6. The larger the MPC - the ______ the multiplier

7. Dictates rises and falls in consumption expenditure

8. Two factors that influence or change investment plans

9. Most economic theory is based on this

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

11. Appropriate changes in government expenditures that occur naturally

12. Savings in circular flow diagram is...

13. Contractionary fiscal policy would be used to counteract _________

14. The average tax rate rises with GDP

15. Demand side effects are large; supply side - small

16. A deficit that persists during full employment

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

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

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

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

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

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

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

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

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

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

27. Factors that change domestic imports

28. Equation for MPC out of real GDP

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

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

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

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

33. Sizes of MPS and multiplier

34. A deficit that arises out of a recession

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

36. According to Keynesian theory - this is horizontal

37. What changes government expenditure

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

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

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

41. The purchase of foreign goods or services

42. 'Supply creates its own demand.'

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

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

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

46. Made up of autonomous expenditure and induced expenditure

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

48. Real GDP - net taxes

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

50. An increase in real GDP _________ imports