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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 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.






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






3. 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.






4. 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






5. The income of households after taxes have been paid






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






7. The study of scarcity and choice.






8. 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






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






10. Not significantly responsive to changes in price.






11. 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.






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






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






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






15. 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.






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






17. 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.






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






19. Total revenue (TR) price of a good multiplied by the number of units sold; TR = P*Q.






20. A bad depressingly prolonged recession in economic activity.






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






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






23. 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?






24. 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






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






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






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






28. (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.






29. 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






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






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






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






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






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






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






36. 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.






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






38. The highest point of a business cycle.






39. 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.






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






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






42. An increase in the price level






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






44. The branch of economics that deals with human behavior and choices as they relate to the entire economy.






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






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






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






48. 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.






49. 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).






50. 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).