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






2. 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.






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






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






5. The graphical representation of the law of demand. Shows the amount of a good buyers are willing and able to buy at various prices.






6. A type of inflation that occurs when an economy's output (real GDP decreases and its price level rises; production stagnates (as during a recession) while prices (and unemployment) go up.






7. The dollar value of production by a country's citizens.






8. The effort of workers.






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






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






11. 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.






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






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






15. 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






16. 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.






17. 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.






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






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






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.






21. Anything that can be used to produce something else






22. 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).






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






24. Total revenue (TR) price of a good multiplied by the number of units sold; TR = P*Q.






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






26. Significantly responsive to a change in price.






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






28. The cost of something in terms of what one must give up to get it.






29. 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.






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






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






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






33. 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.






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






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






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






37. Price control set when the market price is believed to be too low.






38. The price of a domestic currency in terms of a foreign currency.






39. 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.






40. 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.






41. 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.






42. 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).






43. The amount of a good actually sold.






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






45. The highest point of a business cycle.






46. 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?






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






48. 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.






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






50. 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.