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AP Macroeconomics

Subjects : economics, ap
Instructions:
  • Answer 50 questions in 15 minutes.
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  • Match each statement with the correct term.
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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. A type of inflation that occurs when an economy's output (real GDP decreases and its price level rises; production stagnates (as during a recession) while prices (and unemployment) go up.






2. A civilian - non-institutionalized adult is considered to be unemployed when he or she does not have a job but is actively looking for one; unemployment figures reflect the number of individuals meeting this definition who are parts of the labor forc






3. A law stating that as an additional unit of a particular food is consumed the utility (satisfaction) gained decreases.






4. A person who has been unemployed and searching for a job for so long - that they have given up on finding a job and therefore forfeit unemployment.






5. Where the demand curve is horizontal - reflecting situation in which any change in price reduces quantity demanded to '0.' the result of a competitive market consumers will go elsewhere to purchase the product.






6. Decisions of individual producers and consumers determine what how and for whom to reduce. Minor Government interference. Economy is run by itself.






7. Inflation created when an increase in the costs of production (wages or raw materials) shifts the short-run aggregate supply (AS) curve to the left; tends to push prices up while reducing the level of real GDP at the same time (stagflation).






8. A Latin phrase meaning 'all things constant.'






9. The conflict between limited resources and unlimited human wants; the basic economic problem facing all societies.






10. Law stating that as a price of a good increases - the quantity demanded of the good decreases - and vice versa.






11. A shift of the demand curve resulting from a change in consumer taste and preferences.






12. A good for which there is less demand as income rises; a good the demand for which falls as income rises and rises as income falls; consumer income rises while demand decreases.






13. A country has a trade surplus if the value of its commodity exports exceeds the value of its commodity imports.






14. The proportion of each additional dollar of income that is saved.






15. The addition to total revenue created by selling one additional unit of ouput.






16. When the percent of change in the quantity demanded equals the percent of change in price.






17. A specific percentage of checking account deposits that each bank must keep in liquid - zero-interest reserves; this amount is set by the Fed.






18. Occurs when supply and demand are balanced such that the market price and the quantity exchanged are under no market pressure to change.






19. The proportion of each additional dollar of income that will go toward consumption expenditures.






20. A relationship between two factors in which the factors move in the same direction.






21. The price of a domestic currency in terms of a foreign currency.






22. Results an increase in the demand for normal goods and a decrease in the demand for inferior goods.






23. A period of slow economic growth - usually accompanied by rising unemployment; two consecutive quarters of declining output.






24. The income of households after taxes have been paid






25. A market with only a few sellers - each offering a product that is largely the same as the others' products; in an oligopoly - there is always a tension between cooperation and competition.






26. Inflation that follows from an increase in aggregate demand - which will cause equilibrium real GDP (Y) to increase and the equilibrium price level (P) to increase.






27. Long- run aggregate supply curve






28. A curve depicting the relationship between real GDP demanded (i.e. - expenditures) and the price level in the economy; the aggregate demand curve slopes downward from left to right.






29. The dollar value of all the goods and services sold to house holds.






30. Unemployment that reflects changes in the business cycle; the difference between the official unemployment rate & the natural rate of unemployment.






31. (population); Then there is a shift in the demand curve resulting from and increase or decrease in market demand - as specific consumption related to demographics is concerned.






32. A measure of the price level - or the average level of prices.






33. The long-run pattern of growth and recession.






34. Goods that go together - if price ? the demand for both that good and complimentary good ?.






35. The sum of each individual consumer's demand curves for a certain good in a market (e.g. - all the individual quantities of Good B demanded at each price).






36. Government officials make decisions about economy.






37. The dollar value of goods and services sold to governments.






38. Will shift either to the left(decrease) in demand - or to the right(increase) in demand; shift is caused by a change in one of the non-price determinates for the good.






39. When the price of one currency falls relative to another currency - the first currency has depreciated relative to the other one.






40. A way of measuring the GDP by adding up all spending on final goods and services during a given year.






41. The study of scarcity and choice.






42. Can be measured by using TR as a gauge; a decrease in TR following an increase in Price = Elastic Demand - When Price and TR move in opposite directions..... P?/TR? or P?/TR?






43. Unemployment faced by workers who have lost their jobs because of changing market (demand) conditions & whose skills don't match the requirements of available jobs.






44. Monetary policy methods by which the Fed aims to increase the money supply and lower interest rates - thereby creating an increase in output; in pursuit of expansionary policy goals - the Fed can lower the required reserve ratio - lower the discount






45. Fluctuations in real GDP around the trend value; also called economic fluctuations.






46. The amount of money available to consumers to purchase goods and services.






47. Period in which the economy moves from a trough to a peak and a real GDP is increasing; also called a boom.






48. Anything from the land and/or nature. Ex: minerals - timber - petroleum - cotton.






49. An increase in the price level






50. The gross domestic product calculated using current-year prices; for example - the nominal GDP for 2001 would calculate the value of production using2001 prices for goods and services. Nominal GDP can vary widely from year to year - due to forces suc







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