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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. Contractionary fiscal policy would be used to counteract _________
supply-side
inflation
aggregate demand
equilibrium expenditure
2. A change in equilibrium expenditure divided by a change in aggregate expenditure
equation to determine a multiplier
equilibrium expenditure
at equilibrium expenditure
left
3. Equation for MPC out of real GDP
do not
contractionary fiscal policy
2.86
MPC x (1 - the marginal tax rate)
4. The part of aggregate planned expenditure that does not change when real GDP changes
crowding out effect
MPS
autonomous expenditure
equation of marginal propensity to import
5. C + I + G + N - import function
equation of marginal propensity to import
aggregate expenditure curve
Say's Law
multiplier
6. Demand side effects are large; supply side - small
automatic stabilizers
induced expenditure
traditional view of fiscal policy
AE curve
7. A capitalist economy does not tend to employ its resources fully
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8. Dictates rises and falls in consumption expenditure
equilibrium expenditure
MPC out of real GDP
autonomous expenditure
supply-side
9. A deficit that arises out of a recession
increases
cyclical deficit
progressive tax system
short-run
10. Change in imports divided by the change in real GDP
at equilibrium expenditure
equation of marginal propensity to import
multiplier
cyclical deficit
11. The magnitude of the multiplier depends on the ___ _____
Say's Law
increases
left
AE curve
12. A decrease in government expenditures or an increase in taxes
contractionary fiscal policy
Keynesian theory's criticism
MPS
left
13. Changes in real GDP DO or DO NOT change government expenditure.
do not
LRAS curve
MPC out of real GDP
Classical Theory of Employment
14. Most economic theory is based on this
Say's Law
less
Keynesian model
do not
15. The purchase of foreign goods or services
SRAS curve
imports
investment
contractionary fiscal policy
16. According to classical theory - this is vertical
do not
AE curve
LRAS curve
equilibrium expenditure
17. Savings in circular flow diagram is...
wages
leakage
long-run
equation to determine a multiplier
18. Changes in real GDP DO or DO NOT change investment plans.
do not
cyclical deficit
wages
contractionary fiscal policy
19. The average tax rate rises with GDP
equation to determine a multiplier
progressive tax system
expansionary fiscal policy
cyclical deficit
20. Expansionary fiscal policy would be used to counteract a _________
recession
output
cyclical deficit
Keynesian model
21. 'Supply creates its own demand.'
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22. Factors that change domestic imports
MPS
international prices - international trade agreements - and real GDP in the rest of the world
investment
Keynesian theory's criticism
23. Inventories remain at their target levels when....
investment
short-run
wages
at equilibrium expenditure
24. According to classical theory - demand for this creates unemployment
expected rate of profit and real interest rate
wages
left
international prices - international trade agreements - and real GDP in the rest of the world
25. The amount by which a change in aggregate expenditure is multiplied to determine the change in equilibrium expenditure and real GDP
MPS
expected rate of profit and real interest rate
MPC out of real GDP
multiplier
26. Real GDP - net taxes
disposable income
recession
Classical Theory of Employment
investment
27. (1) Pure competition; (2) Flexible wages and prices; (3) Self-interested motives; (4) People cannot be fooled by money illusions
autonomous expenditure
recession
4 assumptions of Classical Model
investment
28. Appropriate changes in government expenditures that occur naturally
consumption expenditure
automatic stabilizers
short-run
inverse relationship
29. While investment - government spending - and exports remain constant during changes in the GDP - this kind of expenditure changes with the level of GDP
exports
cyclical deficit
aggregate expenditure
consumption expenditure
30. According to Keynesian theory - this is horizontal
aggregate expenditure
exports
SRAS curve
MPS
31. Goods or services produced in a given nation and sold to customers in other nations
Classical Theory of Employment
exports
equilibrium expenditure
imports
32. As real GDP increases - disposable income increases - but by ___ than the increase in real GDP because net taxes also increase.
less
automatic stabilizers
4 assumptions of Classical Model
long-run
33. The level of aggregate expenditure when aggregate planned expenditure equals real GDP
do not
left
autonomous expenditure
equilibrium expenditure
34. The time of production during which there are fixed and variable costs
leakage
expansionary fiscal policy
short-run
induced expenditure
35. Changes in real GDP DO or DO NOT change domestic exports.
output
increases
left
do not
36. Slope of savings function is equal to...
MPC x (1 - the marginal tax rate)
leakage
MPS
AE curve
37. What changes government expenditure
political process
equation to determine a multiplier
contractionary fiscal policy
investment
38. 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
aggregate expenditure
leakage
aggregate demand
39. The government's attempt to influence the economy by setting and changing taxes - transfer payments - and expenditures on goods and services
aggregate expenditure curve
recession
aggregate expenditure schedule
fiscal policy
40. A deficit that persists during full employment
exports
international prices - international trade agreements - and real GDP in the rest of the world
equilibrium expenditure
structural deficit
41. Claims that expansionary fiscal policy will increase interest rates and reduce investment
crowding out effect
aggregate demand
equation to determine a multiplier
equilibrium expenditure
42. The part of aggregate planned expenditure that does change when real GDP changes
induced expenditure
MPC out of real GDP
increases
Keynesian theory's criticism
43. Lists the level of aggregate planned expenditure at each level of real GDP
equation to determine a multiplier
aggregate expenditure schedule
do not
crowding out effect
44. When a fiscal expansion occurs at Potential GDP the Short-Run Aggregate Supply curve (SAS) shifts _____.
fiscal policy
left
exports
progressive tax system
45. Sizes of MPS and multiplier
exports
expansionary fiscal policy
increases
inverse relationship
46. An increase in government expenditures or a decrease in taxes
do not
expansionary fiscal policy
do not
Classical Theory of Employment
47. Two factors that influence or change investment plans
crowding out effect
Ricardian Equivalence Theorum
expected rate of profit and real interest rate
output
48. Made up of autonomous expenditure and induced expenditure
larger
progressive tax system
short-run
aggregate expenditure
49. The larger the MPC - the ______ the multiplier
inverse relationship
at equilibrium expenditure
larger
induced expenditure
50. Spending for the production and accumulation of capital goods and additions to inventory
MPC out of real GDP
autonomous expenditure
larger
investment