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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 government's attempt to influence the economy by setting and changing taxes - transfer payments - and expenditures on goods and services
fiscal policy
2.86
output
crowding out effect
2. A deficit that persists during full employment
left
structural deficit
crowding out effect
short-run
3. Opposite of traditional view; supply side effects are dominant
supply-side
disposable income
equation of marginal propensity to import
traditional view of fiscal policy
4. A capitalist economy does not tend to employ its resources fully
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5. Real GDP - net taxes
disposable income
do not
structural deficit
MPS
6. The part of aggregate planned expenditure that does not change when real GDP changes
Say's Law
2.86
SRAS curve
autonomous expenditure
7. Goods or services produced in a given nation and sold to customers in other nations
exports
do not
SRAS curve
aggregate expenditure
8. Sizes of MPS and multiplier
Keynesian theory's criticism
do not
inverse relationship
output
9. Changes in real GDP DO or DO NOT change domestic exports.
4 assumptions of Classical Model
do not
expected rate of profit and real interest rate
at equilibrium expenditure
10. The larger the MPC - the ______ the multiplier
at equilibrium expenditure
long-run
Ricardian Equivalence Theorum
larger
11. 'Supply creates its own demand.'
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12. Expansionary fiscal policy would be used to counteract a _________
do not
MPC out of real GDP
fiscal policy
recession
13. Spending for the production and accumulation of capital goods and additions to inventory
international prices - international trade agreements - and real GDP in the rest of the world
equilibrium expenditure
traditional view of fiscal policy
investment
14. According to Keynesian theory - this is horizontal
SRAS curve
inflation
AE curve
short-run
15. According to classical theory - an increase in AD increases the price level but not the level of...
output
investment
progressive tax system
Classical Theory of Employment
16. The part of aggregate planned expenditure that does change when real GDP changes
supply-side
traditional view of fiscal policy
induced expenditure
equilibrium expenditure
17. The average tax rate rises with GDP
progressive tax system
short-run
4 assumptions of Classical Model
traditional view of fiscal policy
18. Changes in real GDP DO or DO NOT change investment plans.
do not
short-run
long-run
expansionary fiscal policy
19. 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
inverse relationship
long-run
progressive tax system
20. Most economic theory is based on this
Keynesian model
at equilibrium expenditure
disposable income
2.86
21. Made up of autonomous expenditure and induced expenditure
increases
wages
aggregate expenditure
aggregate expenditure curve
22. Change in imports divided by the change in real GDP
expected rate of profit and real interest rate
political process
induced expenditure
equation of marginal propensity to import
23. A deficit that arises out of a recession
expansionary fiscal policy
structural deficit
short-run
cyclical deficit
24. Changes in real GDP DO or DO NOT change government expenditure.
traditional view of fiscal policy
less
increases
do not
25. Inventories remain at their target levels when....
SRAS curve
AE curve
expected rate of profit and real interest rate
at equilibrium expenditure
26. Factors that change domestic imports
international prices - international trade agreements - and real GDP in the rest of the world
do not
at equilibrium expenditure
supply-side
27. Dictates rises and falls in consumption expenditure
progressive tax system
MPC out of real GDP
MPC x (1 - the marginal tax rate)
do not
28. The magnitude of the multiplier depends on the ___ _____
MPC x (1 - the marginal tax rate)
left
AE curve
induced expenditure
29. What changes government expenditure
output
aggregate demand
political process
MPS
30. A change in equilibrium expenditure divided by a change in aggregate expenditure
inverse relationship
equation to determine a multiplier
MPS
induced expenditure
31. The level of aggregate expenditure when aggregate planned expenditure equals real GDP
equilibrium expenditure
aggregate expenditure
traditional view of fiscal policy
equation of marginal propensity to import
32. The time of production during which there are only essentially variable costs
long-run
contractionary fiscal policy
aggregate expenditure curve
Keynesian theory's criticism
33. Savings in circular flow diagram is...
equation to determine a multiplier
inverse relationship
leakage
Keynesian theory's criticism
34. As real GDP increases - disposable income increases - but by ___ than the increase in real GDP because net taxes also increase.
less
induced expenditure
short-run
equation to determine a multiplier
35. A decrease in government expenditures or an increase in taxes
LRAS curve
multiplier
contractionary fiscal policy
induced expenditure
36. According to classical theory - this is vertical
LRAS curve
inflation
MPS
disposable income
37. While investment - government spending - and exports remain constant during changes in the GDP - this kind of expenditure changes with the level of GDP
Ricardian Equivalence Theorum
2.86
consumption expenditure
equation of marginal propensity to import
38. C + I + G + N - import function
investment
output
inflation
aggregate expenditure curve
39. Slope of savings function is equal to...
Say's Law
MPS
leakage
increases
40. Claims that expansionary fiscal policy will increase interest rates and reduce investment
crowding out effect
AE curve
aggregate demand
expected rate of profit and real interest rate
41. Equation for MPC out of real GDP
cyclical deficit
equilibrium expenditure
MPC x (1 - the marginal tax rate)
AE curve
42. When a fiscal expansion occurs at Potential GDP the Short-Run Aggregate Supply curve (SAS) shifts _____.
supply-side
expansionary fiscal policy
left
inverse relationship
43. Lists the level of aggregate planned expenditure at each level of real GDP
MPC out of real GDP
4 assumptions of Classical Model
Ricardian Equivalence Theorum
aggregate expenditure schedule
44. The amount by which a change in aggregate expenditure is multiplied to determine the change in equilibrium expenditure and real GDP
recession
equation to determine a multiplier
inflation
multiplier
45. An increase in real GDP _________ imports
multiplier
increases
autonomous expenditure
expected rate of profit and real interest rate
46. Appropriate changes in government expenditures that occur naturally
supply-side
left
equilibrium expenditure
automatic stabilizers
47. The purchase of foreign goods or services
imports
AE curve
2.86
equilibrium expenditure
48. According to classical theory - demand for this creates unemployment
wages
automatic stabilizers
aggregate expenditure curve
Keynesian theory's criticism
49. If the MPC is 0.65 - what is the multiplier?
disposable income
leakage
autonomous expenditure
2.86
50. Demand side effects are large; supply side - small
left
traditional view of fiscal policy
aggregate expenditure
expected rate of profit and real interest rate