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AP Macroeconomics

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.






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






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






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






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






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.






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






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






9. The dollar value of goods and services sold to governments.






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






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






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






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.






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.






16. Significantly responsive to a change in price.






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.






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).






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






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






21. Short-run aggregate supply curve






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






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






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






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






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






27. Consumer income rise - demand will rise.






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






29. The payment that capital receives in the factor market.






30. A bad depressingly prolonged recession in economic activity.






31. A relationship between two factors in which the factors move in opposite directions. ex: price increases - then quantity decreases.






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






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






34. An increase in the price level






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).






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






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






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






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






40. Anything that can be used to produce something else






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.






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






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).






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






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






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.






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






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






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.






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