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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. The lowest point of a business cycle






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






3. 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.






4. The dollar value of all the goods and services sold to house holds.






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






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






7. When the price of one currency falls relative to another currency - the first currency has depreciated relative to the other one.






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






9. The income of households after taxes have been paid






10. The highest point of a business cycle.






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






12. 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






13. 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.






14. 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.






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






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






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






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






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






20. Period in which a recession becomes prolonged and deep - involving high unemployment.






21. The dollar value of goods and services sold to governments.






22. The deliberate control of the money supply by the Federal government.






23. 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.






24. 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.






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






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






27. 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).






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






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






30. 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.






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






32. (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.






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. A Latin phrase meaning 'all things constant.'






35. 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.






36. Anything that can be used to produce something else






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






38. 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






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






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.






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






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






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






44. 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.






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






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






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






48. A good the demand for which rises as income rises and falls as income falls; consumer income rises and demand rises.






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






50. States that as prices rise - people are willing and able to buy less of a good and - hence - the quantity demanded decreases; as prices fall - people are willing and able to buy more - so the quantity demanded increases and the demand curve slopes do







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