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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. When the price of one currency falls relative to another currency - the first currency has depreciated relative to the other one.
market demand curve
complimentary goods
depreciation
entrepreneurship
2. 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).
cost-push inflation
monopoly
opportunity cost
Gross National Product
3. A period of slow economic growth - usually accompanied by rising unemployment; two consecutive quarters of declining output.
Gross Domestic Product
inelastic
interest
recession
4. An increase or decrease in consumer income will cause a shift in the Demand Curve.
scarce
inferior good
required reserve ratio (RRR)
consumer good
5. Price control set when the market price is believed to be too low.
demand curve
price floor
monopoly
command economy
6. The sum of all the quantities of a good supplies by all producers at each price.
law of supply
cyclical unemployment
market supply curve
hidden unemployment
7. Restrictions on the quantity of a good that can be imported
import quotas
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
price floor
inflation
8. The transition point between economic recession and recovery.
economics
opportunity cost
trough
consumer good
9. 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
money multiplier
change in quantity demanded
real GDP
10. Period in which a recession becomes prolonged and deep - involving high unemployment.
nominal GDP
depression
rule of 70
trough
11. The efforts of entrepreneurs in organizing resources for production taking risk to create new enterprises and innovating to develop new product.
substitution effect
entrepreneurship
resource
demand schedule
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.
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
marginal propensity to consume (MPC)
aggregate demand curve
national economic accounts
13. A relationship between two factors in which the factors move in the same direction.
elastic demand
market demand curve
economic aggregates
direct relationship
14. The long-run pattern of growth and recession.
business cycle
cost-push inflation
resource
consumer good
15. 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
inelastic
changes in consumer expectations
microeconomics
real GDP
16. Fluctuations in real GDP around the trend value; also called economic fluctuations.
business cycles
tariff
demand elasticity
unit elastic
17. Decisions of individual producers and consumers determine what how and for whom to reduce. Minor Government interference. Economy is run by itself.
market economy
stagflation
interest
SRAS curve
18. Changes - adjustments - and strategies that the governments implements in spending or taxation to achieve particular economic goals.
fiscal policy
microeconomics
rule of 70
stagflation
19. Economic tool used to determine exactly the amount of the new demand deposits that can be created from an initial deposit.
money multiplier
elastic demand
consumer good
law of supply
20. The branch of economics that deals with human behavior and choices as they relate to the entire economy.
tariff
expansion
structural unemployment
macroeconomics
21. The price of a domestic currency in terms of a foreign currency.
economics
exchange rate
marginal propensity to consume (MPC)
command economy
22. 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?
fiscal policy
demand elasticity
aggregate demand curve
law of demand
23. A specific percentage of checking account deposits that each bank must keep in liquid - zero-interest reserves; this amount is set by the Fed.
government expenditures
required reserve ratio (RRR)
number of composition of consumers
Marginal Propensity to Save (MPS)
24. 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.
demand-pull inflation
Gross Domestic Product
simple money multiplier
business cycles
25. Resource is unavailable in sufficient amounts to satisfy various ways society wants to use it.
interest
market economy
scarce
opportunity cost
26. 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
inelastic demand
law of demand
consumer surplus
real GDP
27. Expenditure by businesses on plant and equipment and the change in business invention.
law of supply
investment expenditures
national economic accounts
perfectly elastic
28. Long- run aggregate supply curve
consumer taste and preferences
demand
LRAS curv
scarce
29. 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.
stagflation
expansionary fiscal policy
A decrease in TR following an increase in price = elastic demand
trough
30. 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
unemployed
inflation
perfectly elastic
opportunity cost
31. 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
interest
simple money multiplier
Phillips curve
32. 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.
depression
government expenditures
marginal revenue
oligopoly
33. Consumer income rise - demand will rise.
Gross National Product
scarcity
expansionary monetary policy
neutral good
34. When consumers substitute a similar - lower priced product for a product which is relatively more expensive.
national economic accounts
substitution effect
consumer good
marginal revenue
35. The income of households after taxes have been paid
depression
business cycle
disposable personal income
consumer surplus
36. Significantly responsive to a change in price.
elastic
quantity exchanged
business cycle
total revenue
37. 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
hyperinflation
national income (NI)
nominal GDP
business cycles
38. A country has a trade surplus if the value of its commodity exports exceeds the value of its commodity imports.
interest
microeconomics
susbtitute goods
trade surplus
39. The cost of something in terms of what one must give up to get it.
scarce
monetary policy
opportunity cost
unemployment rate
40. The addition to total revenue created by selling one additional unit of ouput.
marginal revenue
Gross National Product
command economy
substitution effect
41. Short-run aggregate supply curve
SRAS curve
business cycles
inelastic
change in quantity demanded
42. A country has a trade deficit if the value of its commodity imports exceeds the value of its commodity exports.
fiscal policy
elastic
trade deficit
market equilibrium
43. 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.
demand-pull inflation
government expenditures
real GDP
required reserve ratio (RRR)
44. Decisions by individuals about what to do and what not to do.
individual choice
number of composition of consumers
expenditure approach
marginal propensity to consume (MPC)
45. The graphical representation of the law of demand. Shows the amount of a good buyers are willing and able to buy at various prices.
SRAS curve
demand curve
exchange rate
complimentary goods
46. 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
marginal propensity to consume (MPC)
trade deficit
perfectly elastic
47. Movement up or down a single demand curve - contrasted with movement of the demand curve itself.
change in quantity demanded
movement along a demand curve
labor force
depression
48. The income earned by households and profits earned by firms after subtracting.
consumer surplus
market demand curve
national income (NI)
cost-push inflation
49. 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.
LRAS curv
marginal revenue
change in quantity demanded
quantity exchanged
50. The lowest point of a business cycle
import quotas
inflation
real GDP
trough