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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. The highest point of a business cycle.






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






3. 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.






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






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






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






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






8. Anything that can be used to produce something else






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






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






11. 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.






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






13. The lowest point of a business cycle






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






15. 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






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






17. 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.






18. The income of households after taxes have been paid






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






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. 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






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






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






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






25. The effort of workers.






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






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






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






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






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






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






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






33. 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






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






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






36. 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).






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






38. 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.






39. 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.






40. The proportion of each additional dollar of income that will go toward consumption expenditures.






41. 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.






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






43. The study of scarcity and choice.






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






45. (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.






46. 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.






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






48. 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).






49. A shift in the demand curve resulting from consumer expectations regarding future income or future price of Goods and Services.






50. 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.