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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 bad depressingly prolonged recession in economic activity.






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






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






5. 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).






6. Not significantly responsive to changes in price.






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






8. The highest point of a business cycle.






9. 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






10. Graphic representation of an inverse relationship between wage growth (percentage change in price level - such as inflation) and unemployment.






11. 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.






12. The amount of money available to consumers to purchase goods and services.






13. 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.






14. 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).






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






16. 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






17. The transition point between economic recession and recovery.






18. 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.






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






20. 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






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






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






23. 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.






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






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






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






27. 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






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






29. 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.






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






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






32. 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






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






34. 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.






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






36. A special tax imposed on imported goods.






37. The lowest point of a business cycle






38. Rising prices - across the board.






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






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






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






42. An increase in the price level






43. The study of scarcity and choice.






44. 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.






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






46. Consumer income rise - demand will rise.






47. Long- run aggregate supply curve






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






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






50. 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