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






2. 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).






3. The lowest point of a business cycle






4. Economic tool used to determine exactly the amount of the new demand deposits that can be created from an initial deposit.






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






6. Anything that can be used to produce something else






7. 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.






8. The study of scarcity and choice.






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






10. Anything that shows the economy as a whole.






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






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






13. 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.






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






15. Not significantly responsive to changes in price.






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






17. 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.






18. 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.






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






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






21. A country has a trade surplus if the value of its commodity exports exceeds the value of its commodity imports.






22. 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






23. 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.






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






25. The long-run pattern of growth and recession.






26. Significantly responsive to a change in price.






27. A special tax imposed on imported goods.






28. 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).






29. 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.






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






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






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






33. 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






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






35. 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.






36. 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).






37. The income of households after taxes have been paid






38. An industry structure in which there is only one seller for a product.






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?






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






41. 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.






42. Consumer income rise - demand will rise.






43. A bad depressingly prolonged recession in economic activity.






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. Resource is unavailable in sufficient amounts to satisfy various ways society wants to use it.






46. The gross domestic product calculated using current-year prices; for example - the nominal GDP for 2001 would calculate the value of production using2001 prices for goods and services. Nominal GDP can vary widely from year to year - due to forces suc






47. Rising prices - across the board.






48. 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.






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






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