CLEP Principles of Macroeconomics 3rd Ed., Book + Online

by Jason Welker M.Ed.

Overview

Earn College Credit with REA’s Test Prep for CLEP Principles of Macroeconomics

Everything you need to pass the exam and get the college credit you deserve.

REA leads the way in helping students pass their College Board CLEP exams and earn college credit while reducing their tuition costs.

With 25+ years of experience in test prep for the College-Level Examination Program (CLEP), REA is your trusted source for the most up-to-date test-aligned content. Whether you’re an adult returning to finish your degree, a traditional-age college student, a military service member, or a high school or home-schooled student looking to get a head start on college and shorten your path to graduation, CLEP is perfect for you.

REA’s expert authors know the CLEP tests inside out. And thanks to our partners at Proctortrack (proctortrack.com/clep), you can now take your exam at your convenience, from the comfort of home.
 
Prep for success on the CLEP Principles of Macroeconomics exam with REA’s personalized three-step plan: (1) focus your study, (2) review with the book, and (3) measure your test-readiness.

Our Book + Online prep gives you all the tools you need to make the most of your study time:

• Diagnostic exam: Pinpoint what you already know and what you need to study.
• Targeted subject review: Learn what you’ll be tested on.
• Two full-length practice exams: Zero in on the topics that give you trouble now so you’ll be confident and prepared on test day.
• Glossary of key terms: Round out your prep with must-know vocabulary.

REA is America’s recognized leader in CLEP preparation. Our test prep helps you earn valuable college credit, save on tuition, and accelerate your path to a college degree.
 

Product Details

ISBN-13:	9780738612539
Publisher:	Research & Education Association
Publication date:	02/18/2020
Series:	CLEP Test Preparation
Edition description:	Third Edition, Third
Pages:	324
Product dimensions:	6.60(w) x 9.90(h) x 1.00(d)
Age Range:	16 - 18 Years

About the Author

Jason Welker, M.Ed., is a veteran economics teacher with more than two decades in the classroom. His international teaching career has seen him crisscross the globe, teaching at schools in Thailand, China, Switzerland, and the United States. Mr. Welker now serves as the Economics Content Fellow at Khan Academy, hosts his own YouTube channel, and maintains a website of economics resources for both students and teachers (www.welkerswikinomics.com). He is also the author of REA's AP Macroeconomics Crash Course and the co-author, with Sean Maley, of Baccalaureate Economics for the IB Diploma (Pearson Education, 2021).

Table of Contents

About our Author vii

About REA vii

Chapter 1 Passing the CLEP® Macroeconomics Exam 1

Getting Started 1

The REA Study Center 2

An Overview of the Exam 3

All About the CLEP® Program 4

Options for Military Personnel and Veterans 6

SSD Accommodations for Candidates with Disabilities 6

6-Week Study Plan 7

Test-Taking Tips 7

The Day of the Exam 8

Online Diagnostic Test rea.com/studycenter

Chapter 2 Basic Economic Concepts 9

Scarcity-The "Basic Economic Problem" 9

Economic Systems 9

Choice, Opportunity Cost, and the Production Possibilities Curve (PPC) 11

The Shape of the PPC 13

Shifts of the PPC 14

Comparative Advantage, Specialization, and Exchange 16

Demand, Supply, and Market Equilibrium 18

Movements along a Demand Curve 20

Changes in Demand and Shifts of the Demand Curve 22

Normal versus Inferior Goods 24

Substitutes versus Complements 24

Movements Along a Supply Curve 26

Changes in Supply and Shifts of the Supply Curve 27

Market Equilibrium 29

Chapter 3 Measurement of Economic Performance 35

The Circular Flow 35

Gross Domestic Product 37

Components of Gross Domestic Product 37

Real versus Nominal Gross Domestic Product 42

Nominal and Real Values 47

Demand-Pull versus Cost-Push Inflation 49

Costs of Inflation 50

Unemployment-Definition and Measurement 51

Natural Rate of Unemployment 54

Chapter 4 National Income and Price Determination 57

Aggregate Demand-Determinants of Aggregate Demand 57

Multiplier Effects 61

The Crowding-Out Effect 65

Aggregate Supply-Short-Run and Long-Run Analyses 67

Sticky versus Flexible Wages and Prices 68

Determinants of Aggregate Supply 71

Macroeconomic Equilibrium-Short and Long Run 74

Actual versus Full-Employment Output 75

Business Cycle and Economic Fluctuations 80

Chapter 5 Financial Sector 85

Money, Banking, and the Financial Sector 85

Definition of Financial Assets: Money, Stocks, Bonds 85

Time Value of Money (Present and Future Value) 88

Banks and Creation of Money 92

Money Demand 97

Money Market 99

Loanable Funds Marke 104

Central Bank and Control of the Money Supply 112

Tools of Central Bank Policy 112

Quantity Theory of Money 118

Chapter 6 Inflation, Unemployment, and Stabilization Policies 123

Fiscal and Monetary Policies 123

Demand-Side Effects 123

Supply-Side Effects 132

Policy Mix 133

Government Deficits and Debt 134

Inflation and Unemployment 139

The Phillips Curve: Short Run versus Long Run 139

Role of Expectations 151

Chapter 7 Economic Growth and Productivity 153

Sources of Economic Growth-Investment in Human Capital 155

Sources of Economic Growth-Investment in Physical Capital 156

Research and Development, and Technological Progress 156

Growth Policy 157

Chapter 8 Open Economy: International Trade and Finance 161

Balance of Payments Accounts 161

Balance of Trade 161

Current Account 162

The Capital and Financial Account 164

Foreign Exchange Market 167

Demand for and Supply of Foreign Exchange 167

Exchange Rate Determination 169

Currency Appreciation and Depreciation 171

Exchange Rate Policies 174

Inflows, Outflows, and Restrictions 177

Net Exports and Capital Flows 177

Links to Financial and Goods Markets 179

Tariffs and Quotas 180

Topic Grid for Practice Tests 1 and 2 185

Practice Test 1 (also available online at rea.com/studycenter) 187

Answer Key 218

Detailed Explanations of Answers 219

Practice Test 2 (also available online at rea.com/studycenter) 237

Answer Key 269

Detailed Explanations of Answers 270

Answer Sheets 288

Glossary 291

Index 309