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