Test your basic knowledge |

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






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






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






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






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






6. The amount of a good actually sold.






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






8. 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.






9. 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.






10. 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.






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






12. A bad depressingly prolonged recession in economic activity.






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






14. 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.






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






16. 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.






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






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






19. 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.






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






21. 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?






22. The payment that capital receives in the factor market.






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






24. 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






25. The study of scarcity and choice.






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






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






28. Anything that can be used to produce something else






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






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






31. 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.






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






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






34. 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).






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






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






37. The effort of workers.






38. The transition point between economic recession and recovery.






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






40. Government officials make decisions about economy.






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






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






43. 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.






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






45. 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






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






47. Long- run aggregate supply curve






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






49. 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






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