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AP Macroeconomics

Subjects : economics, ap
Instructions:
  • Answer 50 questions in 15 minutes.
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  • Match each statement with the correct term.
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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. The graphical representation of the law of demand. Shows the amount of a good buyers are willing and able to buy at various prices.






2. The transition point between economic recession and recovery.






3. 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).






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






5. 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.






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






7. Rising prices - across the board.






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






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






10. 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.






11. A country has a trade surplus if the value of its commodity exports exceeds the value of its commodity imports.






12. 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.






13. 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






14. 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.






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






16. 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






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






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






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






20. An increase in the price level






21. Occurs when supply and demand are balanced such that the market price and the quantity exchanged are under no market pressure to change.






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






23. A period of slow economic growth - usually accompanied by rising unemployment; two consecutive quarters of declining output.






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






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






26. Long- run aggregate supply curve






27. 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.






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






29. 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.






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






31. 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.






32. 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.






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






34. Anything that shows the economy as a whole.






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






36. 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.






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






38. When Price and TR move in opposite directions..... P?/TR? or P?/TR?






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






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






41. 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.






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






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






44. Short-run aggregate supply curve






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






46. Period in which a recession becomes prolonged and deep - involving high unemployment.






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






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






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






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







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