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






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






3. Unemployment that reflects changes in the business cycle; the difference between the official unemployment rate & the natural rate of unemployment.






4. 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.






5. 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.






6. 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






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






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






9. 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.






10. 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






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






12. 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.






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






14. 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).






15. Anything that shows the economy as a whole.






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






17. 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?






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






19. Long- run aggregate supply curve






20. 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.






21. 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






22. The lowest point of a business cycle






23. 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






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






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






26. Decisions by individuals about what to do and what not to do.






27. Economic tool used to determine exactly the amount of the new demand deposits that can be created from an initial deposit.






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






29. 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.






30. The study of scarcity and choice.






31. Rising prices - across the board.






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






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






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






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






36. A bad depressingly prolonged recession in economic activity.






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






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






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






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. The effort of workers.






42. 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).






43. 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.






44. Not significantly responsive to changes in price.






45. The transition point between economic recession and recovery.






46. 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.






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






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.






49. A market with only a few sellers - each offering a product that is largely the same as the others' products; in an oligopoly - there is always a tension between cooperation and competition.






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