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






2. 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.






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






4. 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.






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






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






7. 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.






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






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






10. Rising prices - across the board.






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






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






13. 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.






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






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






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






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






18. Long- run aggregate supply curve






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






20. 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).






21. 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.






22. A person who has been unemployed and searching for a job for so long - that they have given up on finding a job and therefore forfeit unemployment.






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






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






25. 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).






26. The income of households after taxes have been paid






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






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






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






30. Anything from the land and/or nature. Ex: minerals - timber - petroleum - cotton.






31. 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).






32. 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.






33. 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.






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






35. 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






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






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






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






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. Restrictions on the quantity of a good that can be imported






41. The effort of workers.






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






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






44. 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






45. Anything that can be used to produce something else






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






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






48. The conflict between limited resources and unlimited human wants; the basic economic problem facing all societies.






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






50. 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?