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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.
  • 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.






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).






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






4. An increase or decrease in consumer income will cause a shift in the Demand Curve.






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






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






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






8. The transition point between economic recession and recovery.






9. The difference between the maximum price a consume is (or would be) willing to pay and the price he or she actually pays.






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






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






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.






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






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






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






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






17. Decisions of individual producers and consumers determine what how and for whom to reduce. Minor Government interference. Economy is run by itself.






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






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






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






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






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?






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.






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.






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






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






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






28. Long- run aggregate supply curve






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.






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






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






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.






33. Consumer income rise - demand will rise.






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






35. The income of households after taxes have been paid






36. Significantly responsive to a change in price.






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






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






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






40. The addition to total revenue created by selling one additional unit of ouput.






41. Short-run aggregate supply curve






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






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.






44. Decisions by individuals about what to do and what not to do.






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.






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






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






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






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.






50. The lowest point of a business cycle