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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. The payment that capital receives in the factor market.






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






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






5. The branch of economics that deals with human behavior and choices as they relate to relatively small units--the individual - the business firm - a single market.






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






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






8. Short-run aggregate supply curve






9. Government officials make decisions about economy.






10. 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).






11. 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.






12. 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






13. Anything that can be used to produce something else






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






15. 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.






16. The study of scarcity and choice.






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






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






19. 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






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






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






22. 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.






23. Not significantly responsive to changes in price.






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






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






26. The transition point between economic recession and recovery.






27. (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.






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






29. 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.






30. The effort of workers.






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






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






33. The income of households after taxes have been paid






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






35. Law stating that as a price of a good increases - the quantity demanded of the good decreases - and vice versa.






36. 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?






37. 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.






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






39. 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.






40. Anything that shows the economy as a whole.






41. A bad depressingly prolonged recession in economic activity.






42. 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.






43. A Latin phrase meaning 'all things constant.'






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






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






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






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






48. Rising prices - across the board.






49. 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.






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