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