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






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






3. (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.






4. A law stating that as an additional unit of a particular food is consumed the utility (satisfaction) gained decreases.






5. The graphical representation of the law of demand. Shows the amount of a good buyers are willing and able to buy at various prices.






6. Where the demand curve is horizontal - reflecting situation in which any change in price reduces quantity demanded to '0.' the result of a competitive market consumers will go elsewhere to purchase the product.






7. 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).






8. Graphic representation of an inverse relationship between wage growth (percentage change in price level - such as inflation) and unemployment.






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






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






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






12. 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.






13. 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).






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






15. 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.






16. When the price of one currency falls relative to another currency - the first currency has depreciated relative to the other one.






17. 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






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






19. Government officials make decisions about economy.






20. 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.






21. A curve defining the relationship between real production and price level.






22. 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.






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






24. 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






25. 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.






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






27. A comprehensive group of statistics that measures various aspects of the economy's performance - net exports exports minus imports.






28. 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?






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






30. 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






31. Anything that shows the economy as a whole.






32. 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.






33. When the percent of change in the quantity demanded is less than then percent of change in price; when there is a small change in the quantity of a good demanded - and a large change in the price of the good.






34. A special tax imposed on imported goods.






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






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. Rising prices - across the board.






38. 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).






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






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






41. 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






42. 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.






43. A shift in the demand curve resulting from consumer expectations regarding future income or future price of Goods and Services.






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






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






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






47. Not significantly responsive to changes in price.






48. 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.






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






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