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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. 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.






2. 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.






3. 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






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






5. Long- run aggregate supply curve






6. 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.






7. 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.






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






9. (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.






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






11. An increase or decrease in consumer income will cause a shift in the Demand Curve.






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






13. The efforts of entrepreneurs in organizing resources for production taking risk to create new enterprises and innovating to develop new product.






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






15. A period of slow economic growth - usually accompanied by rising unemployment; two consecutive quarters of declining output.






16. Government officials make decisions about economy.






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






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






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






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






21. Anything that can be used to produce something else






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






23. The amount of a good actually sold.






24. 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.






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






26. Not significantly responsive to changes in price.






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






28. The income of households after taxes have been paid






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






30. Expenditure by businesses on plant and equipment and the change in business invention.






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






32. 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.






33. The group of individuals who are either working or actively looking for work; the labor force includes the unemployed: labor force = number of individuals in labor force/number of individuals in the adult population - expressed as a percentage.






34. Will shift either to the left(decrease) in demand - or to the right(increase) in demand; shift is caused by a change in one of the non-price determinates for the good.






35. Results an increase in the demand for normal goods and a decrease in the demand for inferior goods.






36. 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.






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






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






39. The lowest point of a business cycle






40. 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.






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






42. 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.






43. Short-run aggregate supply curve






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






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






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






47. 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).






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






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






50. 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.