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AP Macroeconomics

Subjects : economics, ap
  • Answer 50 questions in 15 minutes.
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  • Match each statement with the correct term.
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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 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

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

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

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

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

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

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

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

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

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

11. Anything that can be used to produce something else

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

13. When the percent of change in the quantity demanded equals the percent of change in price.

14. Significantly responsive to a change in price.

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

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

17. Long- run aggregate supply curve

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

19. 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.

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

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

22. A special tax imposed on imported goods.

23. 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

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

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

26. 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).

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

28. A way of measuring the GDP by adding up all spending on final goods and services during a given year.

29. 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.

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

31. Price control set when the market price is believed to be too low.

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

33. 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).

34. 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

35. A bad depressingly prolonged recession in economic activity.

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

37. 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.

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

39. Not significantly responsive to changes in price.

40. 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).

41. 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.

42. 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.

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

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

45. Rising prices - across the board.

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

47. (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.

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

49. 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.

50. The highest point of a business cycle.