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