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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. Real cost of an item is its opportunity cost.
expansionary monetary policy
unit elastic
Gross Domestic Product
opportunity cost
2. Changes - adjustments - and strategies that the governments implements in spending or taxation to achieve particular economic goals.
monopoly
fiscal policy
Gross Domestic Product
movement along a demand curve
3. An increase or decrease in consumer income will cause a shift in the Demand Curve.
quantity exchanged
depression
price floor
consumer good
4. Expenditure by businesses on plant and equipment and the change in business invention.
investment expenditures
hidden unemployment
inferior good
depression
5. Decisions by individuals about what to do and what not to do.
interest
individual choice
real GDP
depression
6. 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.
inferior good
microeconomics
demand-pull inflation
business cycles
7. The conflict between limited resources and unlimited human wants; the basic economic problem facing all societies.
resource
scarcity
demand
depression
8. 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
rule of 70
monetary policy
hyperinflation
elastic
9. The dollar value of goods and services sold to governments.
inferior good
inelastic
number of composition of consumers
government expenditures
10. When consumers substitute a similar - lower priced product for a product which is relatively more expensive.
monetary policy
microeconomics
disposable personal income
substitution effect
11. Economic tool used to determine exactly the amount of the new demand deposits that can be created from an initial deposit.
required reserve ratio (RRR)
direct relationship
elastic
money multiplier
12. 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.
aggregate demand curve
scarce
trough
demand curve shifts
13. The cost of something in terms of what one must give up to get it.
trough
diminishing marginal utility
marginal revenue
opportunity cost
14. 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.
simple money multiplier
command economy
recession
demand
15. 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.
normal good
demand schedule
entrepreneurship
marginal revenue
16. Significantly responsive to a change in price.
normal good
elastic
aggregate supply curve
individual choice
17. 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.
microeconomics
inelastic
demand curve shifts
complimentary goods
18. 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).
expansionary fiscal policy
macroeconomics
law of supply
price floor
19. The efforts of entrepreneurs in organizing resources for production taking risk to create new enterprises and innovating to develop new product.
entrepreneurship
government expenditures
diminishing marginal utility
individual choice
20. A measure of the price level - or the average level of prices.
frictional unemployment
price index
demand-pull inflation
exchange rate
21. Short-run aggregate supply curve
stagflation
SRAS curve
hidden unemployment
market supply curve
22. Restrictions on the quantity of a good that can be imported
import quotas
government expenditures
individual choice
tariff
23. The long-run pattern of growth and recession.
fiscal policy
Marginal Propensity to Save (MPS)
business cycle
Gross Domestic Product
24. The proportion of each additional dollar of income that will go toward consumption expenditures.
marginal propensity to consume (MPC)
inflation
labor force
inelastic
25. The difference between the maximum price a consume is (or would be) willing to pay and the price he or she actually pays.
consumer surplus
inflation
price ceiling
trade deficit
26. 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
law of demand
expansionary monetary policy
microeconomics
consumer surplus
27. Consumer income rise - demand will rise.
unit elastic
neutral good
aggregate supply curve
land
28. A country has a trade deficit if the value of its commodity imports exceeds the value of its commodity exports.
required reserve ratio (RRR)
SRAS curve
import quotas
trade deficit
29. The payment that capital receives in the factor market.
complimentary goods
national income (NI)
interest
consumer surplus
30. A bad depressingly prolonged recession in economic activity.
trough
depression
nominal GDP
expenditure approach
31. A relationship between two factors in which the factors move in opposite directions. ex: price increases - then quantity decreases.
inverse relationship
aggregate supply curve
elastic
perfectly elastic
32. Movement up or down a single demand curve - contrasted with movement of the demand curve itself.
opportunity cost
SRAS curve
consumption expenditures
movement along a demand curve
33. An industry structure in which there is only one seller for a product.
monopoly
depression
individual choice
substitution effect
34. An increase in the price level
inflation
LRAS curv
exchange rate
depreciation
35. 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).
unit elastic
business cycle
perfectly elastic
cost-push inflation
36. The addition to total revenue created by selling one additional unit of ouput.
quantity exchanged
unemployment rate
demand curve
marginal revenue
37. 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
neutral good
real GDP
inflation
consumer good
38. A good the demand for which rises as income rises and falls as income falls; consumer income rises and demand rises.
trade surplus
normal good
opportunity cost
required reserve ratio (RRR)
39. Goods that compete with one another. If the price for one goes up the demand for the other will go up.
susbtitute goods
inelastic demand
elastic demand
inelastic
40. Anything that can be used to produce something else
resource
movement along a demand curve
rule of 70
national economic accounts
41. The graphical representation of the law of demand. Shows the amount of a good buyers are willing and able to buy at various prices.
unit elastic
import quotas
demand curve
expansionary monetary policy
42. The dollar value of production within a nation's border.
marginal propensity to consume (MPC)
market demand curve
Gross Domestic Product
Labor
43. 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
consumption expenditures
price floor
command economy
44. Price control set when the market price is believed to be too high.
price ceiling
labor force
consumer income rise
tariff
45. A country has a trade surplus if the value of its commodity exports exceeds the value of its commodity imports.
trade surplus
consumer income rise
scarcity
consumer good
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.
marginal revenue
tariff
demand-pull inflation
labor force
47. Decisions of individual producers and consumers determine what how and for whom to reduce. Minor Government interference. Economy is run by itself.
demand elasticity
inflation
scarce
market economy
48. A relationship between two factors in which the factors move in the same direction.
SRAS curve
recession
direct relationship
inferior good
49. A specific percentage of checking account deposits that each bank must keep in liquid - zero-interest reserves; this amount is set by the Fed.
real GDP
depreciation
nominal GDP
required reserve ratio (RRR)
50. The proportion of each additional dollar of income that is saved.
Marginal Propensity to Save (MPS)
inferior good
interest
economics