Test your basic knowledge |

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. 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






2. 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.






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






4. 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.






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






6. A special tax imposed on imported goods.






7. 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






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






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






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






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






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






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






14. The study of scarcity and choice.






15. The effort of workers.






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






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






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






19. 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.






20. Consumer income rise - demand will rise.






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






22. The dollar value of all the goods and services sold to house holds.






23. The transition point between economic recession and recovery.






24. Short-run aggregate supply curve






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






26. When Price and TR move in opposite directions..... P?/TR? or P?/TR?






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






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






29. Long- run aggregate supply curve






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






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






32. 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.






33. A bad depressingly prolonged recession in economic activity.






34. 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).






35. The income of households after taxes have been paid






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






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






38. 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.






39. Significantly responsive to a change in price.






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






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






42. 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






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






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






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






46. The highest point of a business cycle.






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






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






49. 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






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