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CLEP Macroeconomics: Measurement Of Economic Performance - 2

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. Dictates rises and falls in consumption expenditure






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






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






4. A deficit that arises out of a recession






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






6. A capitalist economy does not tend to employ its resources fully


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






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






9. Most economic theory is based on this






10. Made up of autonomous expenditure and induced expenditure






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






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






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






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






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






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






17. According to Keynesian theory - this is horizontal






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






19. An increase in real GDP _________ imports






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






21. Appropriate changes in government expenditures that occur naturally






22. According to classical theory - this is vertical






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






24. Equation for MPC out of real GDP






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






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






27. Two factors that influence or change investment plans






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






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






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






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






32. The purchase of foreign goods or services






33. A deficit that persists during full employment






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






35. Real GDP - net taxes






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






37. The average tax rate rises with GDP






38. The larger the MPC - the ______ the multiplier






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






40. Contractionary fiscal policy would be used to counteract _________






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






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






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






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






45. Factors that change domestic imports






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






47. According to classical theory - demand for this creates unemployment






48. What changes government expenditure






49. 'Supply creates its own demand.'


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