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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 highest point of a business cycle.
rule of 70
peak
price floor
Gross National Product
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.
demand-pull inflation
fiscal policy
required reserve ratio (RRR)
demand
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.
neutral good
law of supply
marginal propensity to consume (MPC)
number of composition of consumers
4. The payment that capital receives in the factor market.
interest
inelastic demand
normal good
unemployed
5. The willingness and ability of buyers to purchase a good or service.
rule of 70
demand
trough
susbtitute goods
6. The dollar value of production by a country's citizens.
susbtitute goods
land
Gross National Product
inflation
7. Price control set when the market price is believed to be too high.
exchange rate
expansionary monetary policy
opportunity cost
price ceiling
8. Anything that can be used to produce something else
money multiplier
Phillips curve
demand
resource
9. The dollar value of goods and services sold to governments.
government expenditures
unemployed
monetary policy
recession
10. A good the demand for which rises as income rises and falls as income falls; consumer income rises and demand rises.
inelastic
normal good
diminishing marginal utility
consumption expenditures
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.
A decrease in TR following an increase in price = elastic demand
depression
microeconomics
recession
12. Goods that go together - if price ? the demand for both that good and complimentary good ?.
entrepreneurship
market demand curve
business cycles
complimentary goods
13. The lowest point of a business cycle
depreciation
structural unemployment
demand curve shifts
trough
14. A measure of the price level - or the average level of prices.
demand-pull inflation
Gross National Product
Phillips curve
price index
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
expansionary monetary policy
stagflation
SRAS curve
number of composition of consumers
16. A comprehensive group of statistics that measures various aspects of the economy's performance - net exports exports minus imports.
unemployment rate
number of composition of consumers
demand-pull inflation
national economic accounts
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.
quantity exchanged
Marginal Propensity to Save (MPS)
simple money multiplier
business cycle
18. The income of households after taxes have been paid
tariff
market economy
disposable personal income
scarce
19. When consumers substitute a similar - lower priced product for a product which is relatively more expensive.
price floor
tariff
substitution effect
demand schedule
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.
demand curve shifts
perfectly elastic
labor force
demand-pull inflation
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
unemployed
rule of 70
number of composition of consumers
changes in consumer expectations
22. Graphic representation of an inverse relationship between wage growth (percentage change in price level - such as inflation) and unemployment.
demand schedule
depression
interest
Phillips curve
23. Period in which the economy moves from a trough to a peak and a real GDP is increasing; also called a boom.
expansion
consumption expenditures
national economic accounts
aggregate supply curve
24. A Latin phrase meaning 'all things constant.'
elastic
direct relationship
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
A decrease in TR following an increase in price = elastic demand
25. The effort of workers.
Labor
A decrease in TR following an increase in price = elastic demand
inverse relationship
direct relationship
26. The deliberate control of the money supply by the Federal government.
monetary policy
national economic accounts
Phillips curve
demand elasticity
27. Changes - adjustments - and strategies that the governments implements in spending or taxation to achieve particular economic goals.
fiscal policy
normal good
inverse relationship
recession
28. The long-run pattern of growth and recession.
business cycle
marginal revenue
national economic accounts
macroeconomics
29. Real cost of an item is its opportunity cost.
opportunity cost
structural unemployment
market demand curve
purchasing power
30. The sum of all the quantities of a good supplies by all producers at each price.
depression
changes in consumer expectations
market supply curve
business cycles
31. Economic tool used to determine exactly the amount of the new demand deposits that can be created from an initial deposit.
price ceiling
macroeconomics
import quotas
money multiplier
32. Total revenue (TR) price of a good multiplied by the number of units sold; TR = P*Q.
total revenue
neutral good
monetary policy
quantity exchanged
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
demand schedule
direct relationship
real GDP
rule of 70
34. Decisions of individual producers and consumers determine what how and for whom to reduce. Minor Government interference. Economy is run by itself.
inferior good
market economy
market equilibrium
inflation
35. The proportion of each additional dollar of income that is saved.
consumer surplus
command economy
demand curve shifts
Marginal Propensity to Save (MPS)
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).
expansionary fiscal policy
monetary policy
peak
monopoly
37. The amount of money available to consumers to purchase goods and services.
inelastic demand
peak
purchasing power
depression
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.
elastic demand
cyclical unemployment
LRAS curv
hyperinflation
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.
scarcity
structural unemployment
national economic accounts
LRAS curv
40. The proportion of each additional dollar of income that will go toward consumption expenditures.
command economy
inferior good
marginal propensity to consume (MPC)
consumer good
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.
Phillips curve
demand-pull inflation
trough
entrepreneurship
42. When Price and TR move in opposite directions..... P?/TR? or P?/TR?
inelastic
A decrease in TR following an increase in price = elastic demand
entrepreneurship
economics
43. The study of scarcity and choice.
rule of 70
expansion
economics
unemployed
44. A relationship between two factors in which the factors move in opposite directions. ex: price increases - then quantity decreases.
government expenditures
market economy
inverse relationship
expansion
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.
aggregate demand curve
neutral good
number of composition of consumers
marginal propensity to consume (MPC)
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.
inferior good
aggregate demand curve
cyclical unemployment
frictional unemployment
47. Fluctuations in real GDP around the trend value; also called economic fluctuations.
money multiplier
business cycles
microeconomics
total revenue
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).
Gross National Product
consumer surplus
inflation
market demand curve
49. A shift in the demand curve resulting from consumer expectations regarding future income or future price of Goods and Services.
market equilibrium
inferior good
peak
changes in consumer expectations
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.
scarcity
expenditure approach
quantity exchanged
change in quantity demanded