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