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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. Rising prices - across the board.






2. 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.






3. An increase in the price level






4. 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






5. 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.






6. The efforts of entrepreneurs in organizing resources for production taking risk to create new enterprises and innovating to develop new product.






7. Not significantly responsive to changes in price.






8. Expenditure by businesses on plant and equipment and the change in business invention.






9. A comprehensive group of statistics that measures various aspects of the economy's performance - net exports exports minus imports.






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






11. 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).






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






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






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






15. The cost of something in terms of what one must give up to get it.






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






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






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






19. A table showing quantities of a good demanded at varying prices; a table demonstrating the number of units of a good demanded at various points.






20. The transition point between economic recession and recovery.






21. 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.






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






23. Changes - adjustments - and strategies that the governments implements in spending or taxation to achieve particular economic goals.






24. 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.






25. The willingness and ability of buyers to purchase a good or service.






26. Period in which a recession becomes prolonged and deep - involving high unemployment.






27. The lowest point of a business cycle






28. 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.






29. 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.






30. 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.






31. A movement along the demand curve in response to a change in price - ceteris paribus; change in price means move along the demand curve; movement = money.






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






33. Price control set when the market price is believed to be too high.






34. 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






35. A very high rate of inflation - under which prices go up very rapidly - often more than 1 -000 percent in a year. This causes money to become a poor store of value.






36. 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.






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






38. 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?






39. 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






40. Decisions by individuals about what to do and what not to do.






41. Price control set when the market price is believed to be too low.






42. The effort of workers.






43. 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






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






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






46. The group of individuals who are either working or actively looking for work; the labor force includes the unemployed: labor force = number of individuals in labor force/number of individuals in the adult population - expressed as a percentage.






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






48. Restrictions on the quantity of a good that can be imported






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






50. Enacted when the government deliberately increases its deficit to stimulate the economy; the government increases its spending (increases G) - cuts taxes (decreases T) - or both - and stimulates the economy by expanding aggregate demand (AD).