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