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