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Test your basic knowledge |
AP Macroeconomics
Start Test
Study First
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 country has a trade deficit if the value of its commodity imports exceeds the value of its commodity exports.
SRAS curve
law of supply
trade deficit
neutral good
2. Decisions by individuals about what to do and what not to do.
change in quantity demanded
market supply curve
individual choice
aggregate demand curve
3. (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.
number of composition of consumers
Phillips curve
investment expenditures
cost-push inflation
4. A law stating that as an additional unit of a particular food is consumed the utility (satisfaction) gained decreases.
consumer income rise
diminishing marginal utility
consumer surplus
demand
5. The graphical representation of the law of demand. Shows the amount of a good buyers are willing and able to buy at various prices.
hidden unemployment
aggregate supply curve
government expenditures
demand curve
6. 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.
perfectly elastic
resource
inelastic
exchange rate
7. 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).
stagflation
inflation
cost-push inflation
Marginal Propensity to Save (MPS)
8. Graphic representation of an inverse relationship between wage growth (percentage change in price level - such as inflation) and unemployment.
Phillips curve
expansion
elastic
expansionary monetary policy
9. A shift of the demand curve resulting from a change in consumer taste and preferences.
aggregate demand curve
law of supply
consumer taste and preferences
normal good
10. The sum of all the quantities of a good supplies by all producers at each price.
market supply curve
business cycles
marginal revenue
land
11. The willingness and ability of buyers to purchase a good or service.
aggregate demand curve
money multiplier
demand
opportunity cost
12. 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.
consumption expenditures
demand-pull inflation
trough
price ceiling
13. 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).
unit elastic
market demand curve
investment expenditures
demand curve
14. Restrictions on the quantity of a good that can be imported
peak
import quotas
A decrease in TR following an increase in price = elastic demand
unemployed
15. 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.
consumer good
simple money multiplier
elastic
complimentary goods
16. When the price of one currency falls relative to another currency - the first currency has depreciated relative to the other one.
consumer taste and preferences
consumption expenditures
depreciation
Marginal Propensity to Save (MPS)
17. 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
expansionary monetary policy
scarcity
business cycles
law of demand
18. A country has a trade surplus if the value of its commodity exports exceeds the value of its commodity imports.
trade surplus
expansion
market demand curve
marginal propensity to consume (MPC)
19. Government officials make decisions about economy.
SRAS curve
recession
command economy
unemployed
20. 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.
Marginal Propensity to Save (MPS)
microeconomics
depression
structural unemployment
21. A curve defining the relationship between real production and price level.
hidden unemployment
aggregate supply curve
peak
Labor
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.
monetary policy
stagflation
land
price ceiling
23. The efforts of entrepreneurs in organizing resources for production taking risk to create new enterprises and innovating to develop new product.
entrepreneurship
diminishing marginal utility
demand
demand elasticity
24. 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
oligopoly
inflation
unemployed
consumer surplus
25. 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.
required reserve ratio (RRR)
monopoly
law of supply
trade deficit
26. Real cost of an item is its opportunity cost.
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
inverse relationship
national income (NI)
opportunity cost
27. A comprehensive group of statistics that measures various aspects of the economy's performance - net exports exports minus imports.
price ceiling
national economic accounts
inelastic demand
tariff
28. 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?
demand elasticity
diminishing marginal utility
monopoly
law of supply
29. A specific percentage of checking account deposits that each bank must keep in liquid - zero-interest reserves; this amount is set by the Fed.
cyclical unemployment
expansionary fiscal policy
required reserve ratio (RRR)
structural unemployment
30. 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
command economy
rule of 70
Gross Domestic Product
monetary policy
31. Anything that shows the economy as a whole.
demand
tariff
demand schedule
economic aggregates
32. 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.
unemployed
law of demand
change in quantity demanded
fiscal policy
33. 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.
oligopoly
money multiplier
inelastic demand
entrepreneurship
34. A special tax imposed on imported goods.
tariff
unit elastic
money multiplier
labor force
35. The dollar value of production by a country's citizens.
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
Phillips curve
market demand curve
Gross National Product
36. 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.
elastic demand
opportunity cost
consumer surplus
macroeconomics
37. Rising prices - across the board.
inflation
consumer surplus
entrepreneurship
government expenditures
38. 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).
hyperinflation
expansionary fiscal policy
demand-pull inflation
number of composition of consumers
39. A relationship between two factors in which the factors move in the same direction.
consumer good
susbtitute goods
direct relationship
Labor
40. An increase or decrease in consumer income will cause a shift in the Demand Curve.
consumer good
demand curve shifts
demand elasticity
complimentary goods
41. 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
real GDP
microeconomics
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
nominal GDP
42. 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.
price floor
economics
price index
aggregate demand curve
43. A shift in the demand curve resulting from consumer expectations regarding future income or future price of Goods and Services.
changes in consumer expectations
marginal propensity to consume (MPC)
quantity exchanged
opportunity cost
44. Price control set when the market price is believed to be too high.
scarcity
price ceiling
macroeconomics
economics
45. A period of slow economic growth - usually accompanied by rising unemployment; two consecutive quarters of declining output.
recession
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
inverse relationship
aggregate demand curve
46. The dollar value of production within a nation's border.
Gross Domestic Product
monetary policy
inferior good
peak
47. Not significantly responsive to changes in price.
inelastic
scarcity
nominal GDP
microeconomics
48. 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.
consumer income rise
market demand curve
elastic demand
hyperinflation
49. The cost of something in terms of what one must give up to get it.
opportunity cost
marginal revenue
frictional unemployment
LRAS curv
50. Decisions of individual producers and consumers determine what how and for whom to reduce. Minor Government interference. Economy is run by itself.
law of demand
scarcity
market economy
trough