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