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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. 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






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






3. 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






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






5. Unemployment faced by workers who have lost their jobs because of changing market (demand) conditions & who have transferable skills; unemployment due to the natural frictions of the economy.






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






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






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






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






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






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






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






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






14. 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.






15. 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.






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






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






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






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






20. The percentage of the civilian labor force that is unemployed. The number of persons unemployed divided by the number of persons in the civilian labor force (expressed as a percentage).






21. 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






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






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






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






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






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






28. 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






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






30. The amount of a good actually sold.






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






32. 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






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






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






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






36. A good for which there is less demand as income rises; a good the demand for which falls as income rises and rises as income falls; consumer income rises while demand decreases.






37. Not significantly responsive to changes in price.






38. 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).






39. Anything that can be used to produce something else






40. Long- run aggregate supply curve






41. Government officials make decisions about economy.






42. The effort of workers.






43. Goods that go together - if price ? the demand for both that good and complimentary good ?.






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






45. 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






46. 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.






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






48. Consumer income rise - demand will rise.






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