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