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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. Not significantly responsive to changes in price.






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






3. 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?






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






5. 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.






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






7. The effort of workers.






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






9. An industry structure in which there is only one seller for a product.






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






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






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






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






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






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






17. Significantly responsive to a change in price.






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






19. An increase in the price level






20. 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






21. A bad depressingly prolonged recession in economic activity.






22. 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.






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






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






25. The income of households after taxes have been paid






26. 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.






27. 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.






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






29. The study of scarcity and choice.






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






31. 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.






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






33. A curve defining the relationship between real production and price level.






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






35. 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.






36. (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.






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






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






39. 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






40. 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.






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






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






43. Price control set when the market price is believed to be too low.






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






45. 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.






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






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






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






49. Movement up or down a single demand curve - contrasted with movement of the demand curve itself.






50. 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.