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AP Macroeconomics

Subjects : economics, ap
  • Answer 50 questions in 15 minutes.
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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. 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.

2. States that as the price of a good increases - the quantity supplied of a good increases - and as the price of a good decreases - the quantity supplied of the good decreases.

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

4. 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.

5. A measure of the price level - or the average level of prices.

6. The branch of economics that deals with human behavior and choices as they relate to the entire economy.

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

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

9. The percentage of the civilian labor force that is unemployed. The number of persons unemployed divided by the number of persons in the civilian labor force (expressed as a percentage).

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

11. Price control set when the market price is believed to be too low.

12. 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.

13. Not significantly responsive to changes in price.

14. 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.

15. Rising prices - across the board.

16. 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).

17. The transition point between economic recession and recovery.

18. The conflict between limited resources and unlimited human wants; the basic economic problem facing all societies.

19. Long- run aggregate supply curve

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

21. 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.

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

23. The highest point of a business cycle.

24. (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.

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

26. The price of a domestic currency in terms of a foreign currency.

27. 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

28. The sum of all the quantities of a good supplies by all producers at each price.

29. A shift of the demand curve resulting from a change in consumer taste and preferences.

30. An industry structure in which there is only one seller for a product.

31. The dollar value of production within a nation's border.

32. 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).

33. Goods that compete with one another. If the price for one goes up the demand for the other will go up.

34. A country has a trade deficit if the value of its commodity imports exceeds the value of its commodity exports.

35. 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.

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

37. 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?

38. The efforts of entrepreneurs in organizing resources for production taking risk to create new enterprises and innovating to develop new product.

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

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

41. 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.

42. 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

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

44. 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.

45. Consumer income rise - demand will rise.

46. The amount of money available to consumers to purchase goods and services.

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

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

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

50. An increase in the price level