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Test your basic knowledge |
AP Macroeconomics
Start Test
Study First
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. Not significantly responsive to changes in price.
inelastic
changes in consumer expectations
entrepreneurship
cost-push inflation
2. A specific percentage of checking account deposits that each bank must keep in liquid - zero-interest reserves; this amount is set by the Fed.
law of demand
depression
business cycles
required reserve ratio (RRR)
3. 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.
aggregate supply curve
simple money multiplier
expansion
scarcity
4. When Price and TR move in opposite directions..... P?/TR? or P?/TR?
market economy
real GDP
perfectly elastic
A decrease in TR following an increase in price = elastic demand
5. When consumers substitute a similar - lower priced product for a product which is relatively more expensive.
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
trade surplus
substitution effect
resource
6. The effort of workers.
Labor
unemployed
susbtitute goods
entrepreneurship
7. Occurs when supply and demand are balanced such that the market price and the quantity exchanged are under no market pressure to change.
market equilibrium
depreciation
Gross Domestic Product
unemployed
8. The amount of a good actually sold.
consumer taste and preferences
cyclical unemployment
tariff
quantity exchanged
9. The study of scarcity and choice.
aggregate supply curve
economics
expansionary monetary policy
number of composition of consumers
10. Restrictions on the quantity of a good that can be imported
import quotas
opportunity cost
required reserve ratio (RRR)
cyclical unemployment
11. Decisions of individual producers and consumers determine what how and for whom to reduce. Minor Government interference. Economy is run by itself.
business cycles
inferior good
market economy
labor force
12. Law stating that as a price of a good increases - the quantity demanded of the good decreases - and vice versa.
law of demand
quantity exchanged
national economic accounts
movement along a demand curve
13. Graphic representation of an inverse relationship between wage growth (percentage change in price level - such as inflation) and unemployment.
inelastic
trough
demand schedule
Phillips curve
14. 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.
demand schedule
complimentary goods
hyperinflation
price ceiling
15. A relationship between two factors in which the factors move in the same direction.
movement along a demand curve
direct relationship
nominal GDP
expenditure approach
16. The graphical representation of the law of demand. Shows the amount of a good buyers are willing and able to buy at various prices.
inferior good
demand curve
quantity exchanged
substitution effect
17. Price control set when the market price is believed to be too high.
price ceiling
macroeconomics
stagflation
opportunity cost
18. 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.
frictional unemployment
opportunity cost
expansion
susbtitute goods
19. 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.
business cycles
command economy
change in quantity demanded
demand curve shifts
20. 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.
demand curve shifts
inelastic demand
opportunity cost
oligopoly
21. Short-run aggregate supply curve
national income (NI)
perfectly elastic
change in quantity demanded
SRAS curve
22. Anything from the land and/or nature. Ex: minerals - timber - petroleum - cotton.
purchasing power
consumer surplus
land
market equilibrium
23. The proportion of each additional dollar of income that is saved.
market demand curve
total revenue
macroeconomics
Marginal Propensity to Save (MPS)
24. 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.
macroeconomics
market demand curve
national economic accounts
oligopoly
25. Movement up or down a single demand curve - contrasted with movement of the demand curve itself.
law of demand
movement along a demand curve
land
perfectly elastic
26. A country has a trade surplus if the value of its commodity exports exceeds the value of its commodity imports.
susbtitute goods
trade surplus
demand elasticity
inflation
27. 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.
elastic
scarce
elastic demand
microeconomics
28. An increase in the price level
aggregate supply curve
LRAS curv
A decrease in TR following an increase in price = elastic demand
inflation
29. The cost of something in terms of what one must give up to get it.
recession
structural unemployment
opportunity cost
government expenditures
30. Expenditure by businesses on plant and equipment and the change in business invention.
market economy
investment expenditures
direct relationship
opportunity cost
31. A relationship between two factors in which the factors move in opposite directions. ex: price increases - then quantity decreases.
A decrease in TR following an increase in price = elastic demand
tariff
macroeconomics
inverse relationship
32. Economic tool used to determine exactly the amount of the new demand deposits that can be created from an initial deposit.
money multiplier
expenditure approach
trade surplus
fiscal policy
33. A way of measuring the GDP by adding up all spending on final goods and services during a given year.
diminishing marginal utility
expenditure approach
money multiplier
Gross Domestic Product
34. Rising prices - across the board.
inflation
unemployment rate
cyclical unemployment
law of demand
35. Price control set when the market price is believed to be too low.
price floor
land
neutral good
expenditure approach
36. The difference between the maximum price a consume is (or would be) willing to pay and the price he or she actually pays.
substitution effect
consumer surplus
government expenditures
law of demand
37. The branch of economics that deals with human behavior and choices as they relate to the entire economy.
trade deficit
changes in consumer expectations
macroeconomics
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
38. The lowest point of a business cycle
consumption expenditures
market supply curve
trough
oligopoly
39. The price of a domestic currency in terms of a foreign currency.
diminishing marginal utility
substitution effect
interest
exchange rate
40. Goods that go together - if price ? the demand for both that good and complimentary good ?.
aggregate demand curve
interest
complimentary goods
oligopoly
41. 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.
purchasing power
trade deficit
quantity exchanged
hidden unemployment
42. Resource is unavailable in sufficient amounts to satisfy various ways society wants to use it.
national economic accounts
scarce
required reserve ratio (RRR)
changes in consumer expectations
43. Unemployment faced by workers who have lost their jobs because of changing market (demand) conditions & whose skills don't match the requirements of available jobs.
inflation
structural unemployment
hyperinflation
SRAS curve
44. 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.
Marginal Propensity to Save (MPS)
elastic demand
inelastic
consumer income rise
45. The willingness and ability of buyers to purchase a good or service.
oligopoly
Gross Domestic Product
LRAS curv
demand
46. A shift of the demand curve resulting from a change in consumer taste and preferences.
market equilibrium
aggregate supply curve
expansion
consumer taste and preferences
47. 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).
market demand curve
opportunity cost
depression
monetary policy
48. Unemployment that reflects changes in the business cycle; the difference between the official unemployment rate & the natural rate of unemployment.
individual choice
cyclical unemployment
number of composition of consumers
structural unemployment
49. 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.
exchange rate
simple money multiplier
perfectly elastic
required reserve ratio (RRR)
50. 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
rule of 70
trade surplus
real GDP
demand