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






2. 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.






3. The branch of economics that deals with human behavior and choices as they relate to the entire economy.






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






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






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






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






8. The graphical representation of the law of demand. Shows the amount of a good buyers are willing and able to buy at various prices.






9. 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.






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






11. 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






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






13. 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).






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






15. An increase or decrease in consumer income will cause a shift in the Demand Curve.






16. The highest point of a business cycle.






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






18. When Price and TR move in opposite directions..... P?/TR? or P?/TR?






19. 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.






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






21. 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






22. Rising prices - across the board.






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






24. Significantly responsive to a change in price.






25. 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?






26. 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.






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






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






29. 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.






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






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






32. Anything that can be used to produce something else






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






34. The income of households after taxes have been paid






35. Total revenue (TR) price of a good multiplied by the number of units sold; TR = P*Q.






36. Government officials make decisions about economy.






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






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






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






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






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






42. A bad depressingly prolonged recession in economic activity.






43. Anything that shows the economy as a whole.






44. 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






45. A shift in the demand curve resulting from consumer expectations regarding future income or future price of Goods and Services.






46. 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.






47. 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.






48. 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






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






50. 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.