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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 difference between the maximum price a consume is (or would be) willing to pay and the price he or she actually pays.






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






3. 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?






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






5. The income of households after taxes have been paid






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






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






8. A bad depressingly prolonged recession in economic activity.






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






10. 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.






11. 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.






12. A curve defining the relationship between real production and price level.






13. 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






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






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






16. 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).






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






18. Not significantly responsive to changes in price.






19. Government officials make decisions about economy.






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






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






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






24. The branch of economics that deals with human behavior and choices as they relate to relatively small units--the individual - the business firm - a single market.






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






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






27. (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.






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






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






30. 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.






31. 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).






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






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






34. 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






35. A special tax imposed on imported goods.






36. 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






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






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






39. Real cost of an item is its opportunity cost.






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






41. 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.






42. 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.






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






44. 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






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






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






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






48. 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






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






50. The highest point of a business cycle.