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Test your basic knowledge |
CLEP Macroeconomics: National Income And Price Determination
Start Test
Study First
Subjects
:
clep
,
economics
Instructions:
Answer 46 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 relationship between the quantity of real GDP supplied and the price level
wealth effect
fiscal policy
aggregate supply
fluctuation in AD brings fluctuation in...
2. The government's attempt to influence the economy by setting and changing taxes - transfer payments - and expenditures on goods and services
fiscal policy
consumption function
left
marginal propensity to consume (MPC)
3. A persistent increase in aggregate demand that exceeds the increase in potential GDP
increases
inflation is a result of...
monetary policy
inflationary gap
4. A rise in resource costs (labor - fuel - material - etc) will _______ SAS.
short-run equilibrium
equation for MPC
equation for saving function
decrease
5. Job expectations - fiscal or monetary policy - world economy - inflation - profits
vertical LAS
aggregate supply
stagflation
factors that cause shifts in AD curve
6. Tendency for increases in the price level to lower the purchasing power of assets of financial assets and reduce total spending in the economy
inflation is a result of...
1
right-ward shift of SAS
wealth effect
7. Price level exceeds equilibrium price
aggregate demand
surplus
monetary policy
fiscal policy
8. The fraction of a change in disposable income that is saved
fiscal policy
break even income level
equation for MPC
marginal propensity to save (MPS)
9. Increase in long-term growth
increase in potential GDP
recessionary gap
shift to left
shift
10. The ratio of change in consumption to change in income
inflation is a result of...
marginal propensity to consume (MPC)
saving function
LAS
11. People change consumption preferences daily between domestic goods and services and foreign goods and services
substitution effect
decrease
break even income level
inflation is a result of...
12. Relationship between saving and disposable income
saving function
vertical LAS
fiscal policy
factors that cause shifts in AD curve
13. The quantity of real GDP demanded equals the quantity of real GDP supplied
equation for MPS
short-run equilibrium
break even income level
inflationary gap
14. When potential GDP increases - both LAS and SAS curves shift _____.
inflationary gap
right
fluctuation in AD brings fluctuation in...
shift to right
15. Indicates simultaneous change in price level and money wage rate
shift to left
shift to right
movement along vertical LAS
aggregate supply
16. The point on a consumption function where the consumption line intersects the 45 degree line
aggregate quantity
break even income level
marginal propensity to save (MPS)
increases
17. When Short Run Aggregate Supply decreases - Real GDP falls below Potential GDP and the price level _________.
aggregate quantity
increases
SAS
marginal propensity to save (MPS)
18. Slopes downward
inflation is a result of...
AD curve
wealth effect
vertical LAS
19. Equilibrium real GDP exceeds potential GDP
factors that cause shifts in AD curve
marginal propensity to consume (MPC)
equation for MPC
inflationary gap
20. Disposable Income (DI) = Consumption(C) + Saving Consumption (S)
equation for saving function
short-run aggregate supply
decrease
fluctuation in AD brings fluctuation in...
21. Economic growth
shift to left
shift
right-ward shift of SAS
aggregate supply
22. Equilibrium real GDP is below potential GDP
shift to right
leftward shift of SAS
short-run aggregate supply
recessionary gap
23. Relationship between consumption expenditure and disposable income
movement along vertical LAS
shift to right
consumption function
wealth effect
24. When the money wage rate rises - the SAS curve shifts ____ but the LAS curve remains unchanged.
marginal propensity to save (MPS)
substitution effect
SAS
left
25. Price levels rise due to a decrease in Short Run Aggregate Supply
stagflation
slope of consumption function is equal to...
fiscal policy
aggregate supply
26. Decrease in AD
shift to left
left
short-run aggregate supply
consumption function
27. Change in consumption expenditure divided by the change in disposable income
equation for MPC
monetary policy
decrease
inflation is a result of...
28. When AD increases - real GDP __________.
decrease
increases
surplus
monetary policy
29. Increased AD brings a(n) ___________ in SAS.
consumption expenditure
AD curve
break even income level
decrease
30. MPC + MPS
right-ward shift of SAS
leftward shift of SAS
1
increase in potential GDP
31. When AD increases - the price level ________.
monetary policy
leftward shift of SAS
fiscal policy
increases
32. A rise in the price level at a constant money wage rate brings a change in employment and real GDP and a movement along the ___ curve.
leftward shift of SAS
short-run aggregate supply
consumption function
SAS
33. A rise in both the price level and the money wage rate that maintains full employment brings a movement along the ____ curve.
decrease
vertical LAS
substitution effect
LAS
34. Sum of the quantities of all the final goods produced in the economy
increases
aggregate quantity
slope of consumption function is equal to...
fluctuation in AD brings fluctuation in...
35. A non-price related change causes a _____ in the demand curve
surplus
break even income level
shift
decrease
36. Real GDP and around potential GDP
AD curve
substitution effect
factors that cause shifts in AD curve
fluctuation in AD brings fluctuation in...
37. The change in savings divided by the change in disposable income
increases
equation for MPS
recessionary gap
inflationary gap
38. Potential GDP
vertical LAS
decrease
LAS
equation for MPC
39. Economic slowdown
wealth effect
break even income level
1
leftward shift of SAS
40. Relationship between the quantity of real GDP demanded and the price level
marginal propensity to consume (MPC)
recessionary gap
aggregate demand
consumption expenditure
41. Increase in AD
increases
aggregate quantity
shift to right
long-run aggregate supply
42. The relationship between the quantity of real GDP supplied and the price level when the money wage rate and all other influences on production plans remain constant
short-run equilibrium
increases
short-run aggregate supply
inflation is a result of...
43. The value of consumption goods and services bought by households
monetary policy
consumption expenditure
stagflation
fluctuation in AD brings fluctuation in...
44. MPC
recessionary gap
slope of consumption function is equal to...
consumption expenditure
substitution effect
45. The relationship between the quantity of real GDP supplied and the price level when real GDP equals potential GDP; potential GDP is real GDP when all the economy's labor - capital - land - and entrepreneurial ability are fully employed
substitution effect
consumption expenditure
long-run aggregate supply
vertical LAS
46. The government's attempt to influence the economy by setting and changing interest rates - the exchange rate - and the quantity of money
monetary policy
slope of consumption function is equal to...
inflationary gap
movement along vertical LAS