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Test your basic knowledge |
AP Macroeconomics
Start Test
Study First
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 long-run pattern of growth and recession.
aggregate demand curve
structural unemployment
marginal propensity to consume (MPC)
business cycle
2. 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.
consumer good
perfectly elastic
scarcity
price ceiling
3. 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.
interest
microeconomics
money multiplier
business cycles
4. Goods that compete with one another. If the price for one goes up the demand for the other will go up.
susbtitute goods
law of demand
stagflation
entrepreneurship
5. The highest point of a business cycle.
peak
neutral good
consumer surplus
structural unemployment
6. 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.
purchasing power
fiscal policy
aggregate supply curve
law of supply
7. Occurs when supply and demand are balanced such that the market price and the quantity exchanged are under no market pressure to change.
market equilibrium
macroeconomics
complimentary goods
land
8. 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.
demand curve
price ceiling
demand curve shifts
oligopoly
9. The graphical representation of the law of demand. Shows the amount of a good buyers are willing and able to buy at various prices.
demand curve
Gross National Product
individual choice
unit elastic
10. A table showing quantities of a good demanded at varying prices; a table demonstrating the number of units of a good demanded at various points.
inelastic
demand curve shifts
quantity exchanged
demand schedule
11. 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).
rule of 70
structural unemployment
expansionary fiscal policy
hidden unemployment
12. 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.
economic aggregates
money multiplier
elastic demand
disposable personal income
13. When the percent of change in the quantity demanded equals the percent of change in price.
normal good
frictional unemployment
market supply curve
unit elastic
14. 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.
opportunity cost
changes in consumer expectations
hyperinflation
import quotas
15. A specific percentage of checking account deposits that each bank must keep in liquid - zero-interest reserves; this amount is set by the Fed.
required reserve ratio (RRR)
simple money multiplier
money multiplier
change in quantity demanded
16. The dollar value of all the goods and services sold to house holds.
hidden unemployment
consumption expenditures
consumer income rise
market equilibrium
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.
SRAS curve
simple money multiplier
demand curve shifts
command economy
18. The amount of money available to consumers to purchase goods and services.
nominal GDP
cyclical unemployment
demand-pull inflation
purchasing power
19. The addition to total revenue created by selling one additional unit of ouput.
marginal revenue
command economy
Phillips curve
number of composition of consumers
20. A country has a trade surplus if the value of its commodity exports exceeds the value of its commodity imports.
trade surplus
movement along a demand curve
Marginal Propensity to Save (MPS)
structural unemployment
21. Decisions by individuals about what to do and what not to do.
direct relationship
unemployed
command economy
individual choice
22. The transition point between economic recession and recovery.
movement along a demand curve
inflation
individual choice
trough
23. The branch of economics that deals with human behavior and choices as they relate to the entire economy.
monetary policy
rule of 70
demand
macroeconomics
24. A Latin phrase meaning 'all things constant.'
complimentary goods
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
market supply curve
cost-push inflation
25. The price of a domestic currency in terms of a foreign currency.
price floor
demand
change in quantity demanded
exchange rate
26. A good the demand for which rises as income rises and falls as income falls; consumer income rises and demand rises.
normal good
microeconomics
market economy
inferior good
27. When consumers substitute a similar - lower priced product for a product which is relatively more expensive.
trade deficit
real GDP
substitution effect
change in quantity demanded
28. A country has a trade deficit if the value of its commodity imports exceeds the value of its commodity exports.
trough
trade deficit
entrepreneurship
consumption expenditures
29. Restrictions on the quantity of a good that can be imported
economics
import quotas
inverse relationship
required reserve ratio (RRR)
30. (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.
normal good
economics
number of composition of consumers
unemployed
31. The lowest point of a business cycle
inelastic
government expenditures
Marginal Propensity to Save (MPS)
trough
32. The difference between the maximum price a consume is (or would be) willing to pay and the price he or she actually pays.
consumer surplus
entrepreneurship
oligopoly
total revenue
33. Results an increase in the demand for normal goods and a decrease in the demand for inferior goods.
consumer income rise
national income (NI)
trade deficit
diminishing marginal utility
34. The amount of a good actually sold.
quantity exchanged
inverse relationship
market economy
oligopoly
35. When the price of one currency falls relative to another currency - the first currency has depreciated relative to the other one.
depreciation
hidden unemployment
individual choice
expansion
36. A way of measuring the GDP by adding up all spending on final goods and services during a given year.
fiscal policy
expenditure approach
national income (NI)
opportunity cost
37. 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.
demand-pull inflation
price floor
change in quantity demanded
expansionary monetary policy
38. Consumer income rise - demand will rise.
resource
law of demand
neutral good
frictional unemployment
39. 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?
trade surplus
demand elasticity
LRAS curv
marginal propensity to consume (MPC)
40. 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.
cyclical unemployment
hidden unemployment
structural unemployment
required reserve ratio (RRR)
41. A bad depressingly prolonged recession in economic activity.
depression
total revenue
law of supply
command economy
42. The proportion of each additional dollar of income that is saved.
Marginal Propensity to Save (MPS)
stagflation
economics
frictional unemployment
43. Period in which a recession becomes prolonged and deep - involving high unemployment.
stagflation
depression
trade surplus
Labor
44. 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
nominal GDP
rule of 70
changes in consumer expectations
price floor
45. Resource is unavailable in sufficient amounts to satisfy various ways society wants to use it.
unemployment rate
movement along a demand curve
consumer income rise
scarce
46. Unemployment that reflects changes in the business cycle; the difference between the official unemployment rate & the natural rate of unemployment.
land
law of demand
cyclical unemployment
tariff
47. Short-run aggregate supply curve
Marginal Propensity to Save (MPS)
SRAS curve
consumer surplus
hidden unemployment
48. 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).
scarcity
rule of 70
cost-push inflation
interest
49. Law stating that as a price of a good increases - the quantity demanded of the good decreases - and vice versa.
law of demand
total revenue
demand curve shifts
entrepreneurship
50. The conflict between limited resources and unlimited human wants; the basic economic problem facing all societies.
scarcity
tariff
monetary policy
scarce