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AP Macroeconomics

Subjects : economics, ap
Instructions:
  • Answer 50 questions in 15 minutes.
  • If you are not ready to take this test, you can 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. The conflict between limited resources and unlimited human wants; the basic economic problem facing all societies.






2. The deliberate control of the money supply by the Federal government.






3. An increase in the price level






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






5. Resource is unavailable in sufficient amounts to satisfy various ways society wants to use it.






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






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






8. Unemployment faced by workers who have lost their jobs because of changing market (demand) conditions & who have transferable skills; unemployment due to the natural frictions of the economy.






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






10. 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.






11. Movement up or down a single demand curve - contrasted with movement of the demand curve itself.






12. Nominal GDP corrected for inflation; real GDP is calculated using prices from a given base year - which may not be the same as the year being measured or the year in which the calculations are made. Real GDP allows economists to compare changes in pr






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






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






15. The amount of a good actually sold.






16. 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.






17. 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.






18. States that as prices rise - people are willing and able to buy less of a good and - hence - the quantity demanded decreases; as prices fall - people are willing and able to buy more - so the quantity demanded increases and the demand curve slopes do






19. 1/RRR - where RRR is the required reserve ratio expressed as a decimal; if the required reserve ratio is 10% (0.1) - the money multiplier is 1/0.1 = 10.






20. A good the demand for which rises as income rises and falls as income falls; consumer income rises and demand rises.






21. Goods that compete with one another. If the price for one goes up the demand for the other will go up.






22. Not significantly responsive to changes in price.






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






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






25. Graphic representation of an inverse relationship between wage growth (percentage change in price level - such as inflation) and unemployment.






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






27. Mathematical approximation used to measure the effect of economic growth; this rule tells us the approximate number of years it will take for some measure (real GDP - price level - savings account - etc.) to double given a known annual percentage inc






28. 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.






29. Long- run aggregate supply curve






30. Economic tool used to determine exactly the amount of the new demand deposits that can be created from an initial deposit.






31. A relationship between two factors in which the factors move in opposite directions. ex: price increases - then quantity decreases.






32. Government officials make decisions about economy.






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






34. 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






35. The lowest point of a business cycle






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






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






38. The income earned by households and profits earned by firms after subtracting.






39. The study of scarcity and choice.






40. 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






41. The dollar value of production within a nation's border.






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






43. When the percent of change in the quantity demanded is less than then percent of change in price; when there is a small change in the quantity of a good demanded - and a large change in the price of the good.






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






45. The transition point between economic recession and recovery.






46. The dollar value of production by a country's citizens.






47. When consumers substitute a similar - lower priced product for a product which is relatively more expensive.






48. 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.






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






50. When the percent of change in quantity demanded is greater than the percent of change in price; when there is a large change in the quantity of a good demanded - and a small change in price of the good.