The Principles of Macroeconomics CLEP Study Guide

This is the free CLEP study guide for the Principles of Macroeconomics CLEP.  Principles of Macroeconomics has been seen as a pretty difficult test by most so it's a good idea to get some studying in before you take it.

The Principles of Macroeconomics CLEP is worth three credits as long as you score 50 (on the 20-80 scale), as recommended by the American Council on Education.   

There are 100 questions and you have to complete the test in 90 minutes.  

The Principles of Macroeconomics exam covers everything you'd learn in Economics 101 and includes questions about things like aggregate demand, scarcity, utility, profit, monopolies, and more!

This test is focused on the big picture.  It's all about how economics, inflation, interest, demand, and supply work in the wide world.  The concepts are general and so they are easier to grasp than perhaps they will be in microeconomics.  

Sample Questions

Here are some examples from the College Board website.  Highlight the black boxes to see the answers:

"Which of the following is the underlying reason for the law of increasing opportunity cost?"

A.  Higher prices cause production of all goods to increase.

B.  Capital goods cannot be divided into smaller units.

C.  Resources are scarce.

D.  Resources are not equally suited to the production of all goods.

E.  Managerial inefficiency results in diseconomies of scale.

The answer is D.

"Suppose that oranges and apples are close substitutes. If the price of apples decreases, the equilibrium price and quantity of oranges are expected to change in which of the following ways?"

Price of Oranges     Quantity of Oranges

A.  Increase                       Increase

B.  Increase                      Decrease

C.  No change                  Decrease

D.  Decrease                     Increase

E.  Decrease                     Decrease

The answer is E.

"When the price of a product increases, a consumer’s real income decreases, causing the consumer to decrease the quantity of the product demanded. This is known as..."

A.the substitution effect

B.the income effect

C.income elasticity

D.cross-price elasticity

E.diminishing marginal utility

The answer is B.  

As you can see, the Principles of Macroeconomics CLEP is going to test you on quite a range of topics that will include both theoretical and practical applications of what you're learning.  You'll be asked to think in the terms and key phrases used by economists and then you'll be asked to zero in on how that affects the quantity and price of oranges.

The Specifics

According to the College Board website, on the Principles of Macroeconomics CLEP you're going to have to prove that you have 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 Matters you'll be covering are the following:  

55-70%  The Nature and Functions of Product Markets

15%–20% Supply and demand

Market equilibrium

Determinants of supply and demand

Price and quantity controls


Price, income, and cross-price elasticities of demand

Price elasticity of supply

Consumer surplus, producer surplus, and market efficiency

Tax incidence and deadweight loss

5%–10% Theory of consumer choice

Total utility and marginal utility

Utility maximization: equalizing marginal utility per dollar

Individual and market demand curves

Income and substitution effects

10%–15% Production and costs

Production functions: short and long run

Marginal product and diminishing returns

Short-run costs

Long-run costs and economies of scale

Cost minimizing input combination

25%–35% Firm behavior and market structure


Accounting versus economic profits

Normal profit

Profit maximization: MR=MC rule

Perfect competition

Profit maximization

Short-run supply and shut-down decision

Firm and market behaviors in short-run and long-run equilibria

Efficiency and perfect competition


Sources of market power

Profit maximization

Inefficiency of monopoly

Price discrimination


Interdependence, collusion, and cartels

Game theory and strategic behavior

Monopolistic competition

Product differentiation and role of advertising

Profit maximization

Short-run and long-run equilibrium

Excess capacity and inefficiency

8-14%  Basic Economic Concepts

Scarcity, choice, and opportunity cost

Production possibilities curve

Comparative advantage, specialization, and trade

Economic systems

Property rights and the role of incentives

Marginal analysis

10-18%  Factor Markets

Derived factor demand

Marginal revenue product

Labor market and firms' hiring of labor

Market distribution of income

12-18%  Market Failure and the Role of Government


Marginal social benefit and marginal social cost

Positive externalities

Negative externalities


Public goods

Public versus private goods

Provision of public goods

Public policy to promote competition

Antitrust policy


Income distribution


Sources of income inequality

Study Resources

Before you use these, be sure that you have rated yourself as having a level 1, 2, or 3 knowledge of this test's material.  You can find the CollegeByCLEP rating guide on the CLEP study guide page found on the nav bar on the left hand side of your screen.  

Level 1:


These are some of the textbooks recommended by College Board that you can  use to study for the test.  You can find most of them for sale online.  These are textbooks so new editions are always coming out.  If you are okay with buying an outdated version, you can save hundreds of dollars!  Just copy the author, title, and publisher for each book into your search bar.  

The prices that I've given here in the CLEP study guide for the first few textbooks may be outdated; they are price possibilities that I found within five minutes of beginning my search.  This means that you should be able to find similarly low prices with just as little effort. 

Arnold, Macroeconomics, Concise Edition, and Microeconomics, Concise Edition (South-Western)  $4.46 on Amazon

Bade and Parkin, Foundations of Macroeconomics and Foundations of Microeconomics (Addison Wesley)  $2.44 on Amazon

Baumol and Blinder, Microeconomics: Principles & Policy (South-Western)  $0.99 on Alibris

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)

Salvatore, Schaum's Outline of Microeconomics (McGraw-Hill)

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)

If you average the prices out and ignore some of the higher priced textbooks, you could probably afford all of these for $51 + shipping.  Let me recommend, if you plan on buying a lot of textbooks, that you get an Amazon prime membership.  On some purchases at Amazon, that'll mean that you don't have to pay shipping and you can save a ton of money.  

Remember, homeschool families, that creating your high school course around a few of these textbooks (or using them as supplemental reading) will make the CLEP that much easier and also improve your grades in high school.  

Web Resources

These are some of the free web resources the College Board recommends that you use:

Carnegie Mellon University: Open Learning Initiative—Introductory Economics

Economics Department at SUNY Oswego: Online Economics Textbooks

You can also use iTunesU to study for the CLEP.  There are lots of free podcasts there, containing lectures or entire courses on Principles of Macroeconomics.  By the way, be sure to check out Liberty University's iTunesU Podcast on this very subject.  It might be just what you need.

You can create your own high school/CLEP study guide by integrating these study resources into your high school courses or you can study them independently.

Level 2:

An REA study guide, an InstantCert flashcard set, and a SpeedyPrep course are available for the Principles of Macroeconomics CLEP.  You can learn more about these resources on our Level 2 Study Resource pages below.  

REA has a book available for this test that I found used on Amazon for $16.50.  I recommend this book and its accompanying practice tests over every other textbook in this CLEP study guide.

InstantCert provides 328 flashcards and forum discussions for this test.  Of those who used InstantCert flashcards and reported their scores on InstantCert's website, 93% passed the actual CLEP test.  This is one of my top three recommended study resources along with REA books and the Petersons practice tests.  Click on the link to this page to find out how to receive a $5 discount on your first month with InstantCert.

SpeedyPrep offers 425 flashcards on this topic in the form of an amazing online course designed to help you test out of the Principles of MacroeconomicsCLEP test.  They have a 100% money back guarantee if you don't pass the test after completing 90% of their course. 

Level 3:  

There are a Peterson's practice CLEP test bundle, a College Board study guide, and innumerable internet resources available for this test.  You can learn more about some of these resources on our Level 3 Study Resource page(s) below.  

Full-length Peterson's Practice CLEP Tests are available for the Principles of Macroeconomics CLEP test.  If you get a 66% on one of these tests, chances are looking awfully good that you'll pass the actual CLEP.  I scored a 48% and a 65% on two of the three Principles of Macroeconomics Peterson's practice tests and went on to get a 65 on the actual CLEP.

College Board has a .pdf CLEP Study Guide you can download for $10.00, and it includes sample questions, and in-depth analyses of everything you need to know for the test (see "The Specifics" above) all on their website

Don't forget to utilize Google when you study.  If you don't understand something or don't know the reason for why an answer is the way it is, you can do a quick internet search to find out.  It's not hard.  Just go for it and see where your curiosity capers take you!

Study Resource Costs

College Board CLEP Study Guide:  $10.00

Peterson's Practice Tests:  $20

REA CLEP Prep:  $16.50

InstantCert:  $20

SpeedyPrep:  $25

Seventeen textbooks:  $51 + approx. $20 in shipping

Proctoring Fee:  (Usually) $20

Test Fee:  $77

Maximum Total Cost:  $259.50

College Costs Saved:  approx. $3,000 including $1,800 on tuition

You can take this test for much less; you just have to carefully select the resources that you personally need.  

Overlap with other CLEP Exams

The Principles of Macroeconomics CLEP overlaps with only two other tests:  Principles of Microeconomics and Social Sciences and History.

If you take Principles of Macroeconomics, be sure that you also take Principles of Microeconomics at the same time.  There is a lot of overlap between the two, mainly in the theories, ideas, and practical exercises you will be learning and doing.  Think of it as reading two books by the same author.  The style will be the same and the basic philosophical ideas behind them will be the same but they will still be two different books.  At the very least, a lot of terms, concepts, and the general "economics mindset" will carry over between the two.

As for SS&H, 10% of that test covers economics.  I'd say that if you had to choose one, pick Macroeconomics because it is more general will be the better preparation of the two economics CLEP tests for the SS&H test.  However, both would be better!  If you decide to take either one along with SS&H, be sure that you do the economics test first so that it can prepare you to know everything you'll need for the larger, more diverse SS&H test.

Testing Success

After you take this test, be sure that you go to our CLEP Study Guide page to tell us about your CLEP test success/war story.  We want to hear how it went for you, even if it didn't go so well.  Pass on the help you received by telling future testers your story.

My Experience with This Test

When I took this test I didn't really have access to a CLEP study guide like this one.  I had finished a high school economics course about eight months previously and that was the basic knowledge that I started with.  If I had been thinking, I would have taken this test two days after finishing that course but, alas, I was not.  The test required quite a bit of study but the concepts followed from common sense, especially the ones in the problems that involved chart reading and practical problem-solving.  

My assessment practice test score was at about 48% so I knew that I had a little bit of work to do before I could be assured of passing.  I read the REA book, used InstantCert, and probably reviewed my high school textbook for the general, basic terms.  (A Beka's homeschool high school curriculum for economics is a good one for this test.)  My next practice test, I scored 65% and I was ready to take the test.  I passed with a 65 which is somewhere around 75%.  So, you can definitely count on the second Petersons practice CLEP test to be harder than the actual test (at least the one I was given of the random ones possible).

My Advice:  Don't be in a rush to take this test.  It's not one of the easier ones and it's also not too hard.  Take high school economics first and then do your college level study to bring you up to speed.  If you don't wait too long after you finish the high school course and you use the right study materials like the ones suggested in this CLEP study guide, you should be on track to passing the test.  Be sure that you do Microeconomics at the same time for double credits with only a little bit more study.


I think that a big point that anyone can get from this CLEP study guide is that when you study for the CLEP, there are so many resources out there that you could even create your own college course.  The beauty of this is that you can do all of that by spending less than you would on any typical college course.  For our Principles of Macroeconomics CLEP Study Guide, our grand total cost came in under $260 and that's assuming that you buy way more than you'll need.  If you know a bit about Principles of Macroeconomics or have other resources already then you will be able to spend much less.

Remember that combining this CLEP study guide with high school courses will benefit not only you when you take the CLEP but also as you take your high school courses.

We hope that our Principles of Macroeconomics CLEP Study Guide has been and continues to be helpful to you.  We really hope you succeed and that this CLEP study guide can be a part of that!  Let us know if this is helpful and how we can make it better on our Contact Us page.  If you have study resources not mentioned here that have helped you, let us know.  We'd love to add them to our CLEP study guide.  

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