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2022 CLEP Official Study Guide

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This study guide provides practice questions for all 34 CLEP exams. The ideal resource for taking more than one exam. Offered only by the College Board.

CLEP® Principles of Macroeconomics Examination Guide

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The Principles of Macroeconomics exam covers aggregate demand and aggregate supply, and monetary and fiscal policy tools.

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Principles of Macroeconomics


The Principles of Macroeconomics examination covers material that is usually taught in a one-semester undergraduate course in this subject. This aspect of economics deals with principles of economics that apply to an economy as a whole, particularly the general price level, output and income, and interrelations among sectors of the economy. The test places particular emphasis on the determinants of aggregate demand and aggregate supply, and on monetary and fiscal policy tools that can be used to achieve particular policy objectives. Within this context, candidates are expected to understand basic economic concepts such as scarcity and comparative advantage and measurement concepts such as gross domestic product, consumption, investment, unemployment, and inflation. Candidates are also expected to demonstrate knowledge of the institutional structure of the Federal Reserve Bank and the monetary policy tools it uses to stabilize economic fluctuations and promote long-term economic growth, as well as the tools of fiscal policy and their impacts on income, employment, price level, deficits, and interest rate. Basic understanding of foreign exchange markets, balance of payments, and effects of currency appreciation and depreciation on a country's imports and exports is also expected.

The examination contains approximately 80 questions to be answered in 90 minutes. Some of these are pretest questions that will not be scored. Any time candidates spend on tutorials and providing personal information is in addition to the actual testing time.

Knowledge and Skills Required

Questions on the Principles of Macroeconomics examination require candidates to demonstrate one or more of the following abilities.

  • Understanding of important economic terms and concepts
  • Interpretation and manipulation of economic graphs
  • Interpretation and evaluation of economic data
  • Application of simple economic models

The subject matter of the Principles of Macroeconomics examination is drawn from the following topics. The percentages next to the main topics indicate the approximate percentage of exam questions on that topic.

Basic Economic Concepts (12%-15%)

  • Scarcity, choice, and opportunity costs
  • Production possibilities curve
  • Absolute advantage, comparative advantage, specialization, and trade
  • Demand, supply, and market equilibrium
  • Determinants of supply and demand
  • Price controls (price ceilings, price floors, tariffs)

Measurement of Economic Performance (12%–16%)

  • National income accounts
    • Circular flow
    • Gross domestic product
    • Components of gross domestic product
    • Real versus nominal gross domestic product
  • Inflation measurement and adjustment
    • Price indices
    • Nominal and real values
    • Demand-pull versus cost-push inflation
    • Costs of inflation
  • Unemployment
    • Definition and measurement
    • Types of unemployment
    • Natural rate of unemployment

National Income and Price Determination (15%–20%)

  • Aggregate demand
    • Determinants of aggregate demand
    • Multiplier and crowding-out effects
  • Aggregate supply
    • Short-run and long-run analyses
    • Sticky versus flexible wages and prices
    • Determinants of aggregate supply
  • Macroeconomic equilibrium
    • Real output and price level
    • Short and long run
    • Actual versus full-employment output
    • Business cycle and economic fluctuations

Financial Sector (15%–20%)

  • Money, banking, and financial markets
    • Definition of financial assets: money, stocks, bonds
    • Time value of money (present and future value)
    • Measures of money supply
    • Banks and creation of money
    • Money demand
    • Money market
    • Loanable funds market
  • Central bank and control of the money supply
    • Tools of central bank policy
    • Quantity theory of money
    • Real versus nominal interest rates

Inflation, Unemployment, and Stabilization Policies (20%–25%)

  • Fiscal and monetary policies
    • Demand-side effects
    • Supply-side effects
    • Policy mix
    • Government deficits and debt
  • Inflation and unemployment
    • The Phillips curve: short run versus long run
    • Role of expectations

Economic Growth and Productivity (5%–10%)

  • Definition and measurement of economic growth
  • Investment in human capital
  • Investment in physical capital
  • Research and development, and technological progress
  • Growth policy

Open Economy: International Trade and Finance (5%-10%)

  • Balance of payments accounts
    • Balance of trade
    • Current account
    • Financial account (formerly called capital account)
  • Foreign exchange market
    • Demand for and supply of foreign exchange
    • Exchange rate determination
    • Currency appreciation and depreciation
    • Exchange rate policies
  • Inflows, outflows and restrictions
    • Net exports and capital flows
    • Links to financial and goods markets

Study Resources

Most textbooks used in college-level introductory macroeconomics courses cover the topics in the outline given earlier, but the approaches to certain topics and the emphases given to them may differ. To prepare for the Principles of Macroeconomics exam, it is advisable to study one or more college textbooks, which can be found in most college bookstores. When selecting a textbook, check the table of contents against the knowledge and skills required for this test.

There are many introductory economics textbooks that vary greatly in difficulty. Some books are published in one-volume editions that cover both microeconomics and macroeconomics; some of the texts listed here are published in two-volume editions, with one volume covering macroeconomics and the other microeconomics. A companion study guide/workbook is available for most textbooks. The study guides typically include brief reviews, definitions of key concepts, problem sets and multiple-choice test questions with answers. Many publishers also make available computer-assisted learning packages as companions to these texts.


A survey conducted by CLEP found that the following textbooks are among those used by college faculty who teach the equivalent course. You might purchase one or more of these online or at your local college bookstore.

  • Arnold, Macroeconomics, Concise Edition, and Microeconomics, Concise Edition (South-Western)
  • Bade and Parkin, Foundations of Macroeconomics and Foundations of Microeconomics (Addison Wesley)
  • Case and Fair, Principles of Macroeconomics and Principles of Microeconomics (Prentice-Hall)
  • Colander, Macroeconomics and Microeconomics (McGraw-Hill)
  • Frank and Bernanke, Principles of Macroeconomics, Brief Edition, and Principles of Microeconomics, Brief Edition (McGraw-Hill)
  • Gottheil, Principles of Macroeconomics (Thomson/Cengage)
  • Krugman and Wells, Macroeconomics and Microeconomics (Worth)
  • Lipsey, Ragan, and Storer, Macroeconomics and Microeconomics (Addison Wesley)
  • Mankiw, Brief Principles of Macroeconomics and Brief Principles of Microeconomics (South-Western)
  • McConnell and Brue, Macroeconomics and Microeconomics (McGraw-Hill)
  • McEachern, ECON for Macroeconomics and ECON for Microeconomics (South-Western)
  • Samuelson and Nordhaus, Macroeconomics and Microeconomics (McGraw-Hill)
  • Schiller, The Macro Economy Today and The Micro Economy Today (McGraw-Hill)
  • Stiglitz and Walsh, Principles of Macroeconomics and Principles of Microeconomics (W.W. Norton)
  • Taylor and Weerapana, Principles of Macroeconomics and Principles of Microeconomics (South-Western)

Online Resources

These resources, compiled by the CLEP test development committee and staff members, may help you study for your exam. However, none of these sources are designed specifically to provide preparation for a CLEP exam. The College Board has no control over their content and cannot vouch for accuracy.

To broaden your knowledge of economic issues, you may read relevant articles published in the economics periodicals that are available in most college libraries. Magazines like The Economist and newspapers like The Wall Street Journal and The New York Times, along with local papers, may also enhance your understanding of economic issues.

Score Information

Credit Granting Score for Principles of Macroeconomics

ACE Recommended Score*: 50
Semester Hours: 3

Each institution reserves the right to set its own credit-granting policy, which may differ from that of ACE. Contact your college as soon as possible to find out the score it requires to grant credit, the number of credit hours granted, and the course(s) that can be bypassed with a satisfactory score.

*The American Council on Education’s College Credit Recommendation Service (ACE CREDIT) has evaluated CLEP processes and procedures for developing, administering, and scoring the exams. The score listed above is equivalent to a grade of C in the corresponding course. The American Council on Education, the major coordinating body for all the nation’s higher education institutions, seeks to provide leadership and a unifying voice on key higher education issues and to influence public policy through advocacy, research, and program initiatives. Visit the ACE CREDIT website for more information.