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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. 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.
total revenue
business cycles
economic aggregates
aggregate demand curve
2. When Price and TR move in opposite directions..... P?/TR? or P?/TR?
A decrease in TR following an increase in price = elastic demand
Labor
changes in consumer expectations
import quotas
3. The income earned by households and profits earned by firms after subtracting.
inelastic demand
national income (NI)
consumer income rise
labor force
4. 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.
market equilibrium
law of demand
interest
change in quantity demanded
5. A special tax imposed on imported goods.
aggregate demand curve
tariff
monetary policy
susbtitute goods
6. The proportion of each additional dollar of income that will go toward consumption expenditures.
business cycle
business cycles
marginal propensity to consume (MPC)
purchasing power
7. A Latin phrase meaning 'all things constant.'
expenditure approach
monopoly
diminishing marginal utility
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
8. Anything from the land and/or nature. Ex: minerals - timber - petroleum - cotton.
normal good
land
trough
demand
9. A comprehensive group of statistics that measures various aspects of the economy's performance - net exports exports minus imports.
changes in consumer expectations
consumer surplus
change in quantity demanded
national economic accounts
10. Movement up or down a single demand curve - contrasted with movement of the demand curve itself.
movement along a demand curve
inverse relationship
Phillips curve
elastic demand
11. 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.
Gross National Product
Labor
consumption expenditures
inferior good
12. Not significantly responsive to changes in price.
inelastic demand
labor force
resource
inelastic
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.
microeconomics
inelastic demand
national economic accounts
trough
14. A bad depressingly prolonged recession in economic activity.
price floor
frictional unemployment
stagflation
depression
15. The lowest point of a business cycle
trough
tariff
price ceiling
rule of 70
16. (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.
normal good
number of composition of consumers
demand schedule
inflation
17. Occurs when supply and demand are balanced such that the market price and the quantity exchanged are under no market pressure to change.
price floor
individual choice
market equilibrium
inflation
18. The cost of something in terms of what one must give up to get it.
SRAS curve
opportunity cost
rule of 70
movement along a demand curve
19. Long- run aggregate supply curve
LRAS curv
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
entrepreneurship
scarcity
20. 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
hidden unemployment
law of demand
land
required reserve ratio (RRR)
21. An increase or decrease in consumer income will cause a shift in the Demand Curve.
expansionary monetary policy
simple money multiplier
neutral good
consumer good
22. Results an increase in the demand for normal goods and a decrease in the demand for inferior goods.
law of demand
Gross Domestic Product
consumer income rise
business cycle
23. 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.
demand
stagflation
normal good
market economy
24. 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
real GDP
consumer surplus
market equilibrium
opportunity cost
25. 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
consumer taste and preferences
rule of 70
simple money multiplier
cyclical unemployment
26. The efforts of entrepreneurs in organizing resources for production taking risk to create new enterprises and innovating to develop new product.
resource
entrepreneurship
complimentary goods
unemployment rate
27. An increase in the price level
depression
inflation
inelastic demand
cost-push inflation
28. Period in which the economy moves from a trough to a peak and a real GDP is increasing; also called a boom.
rule of 70
expansion
direct relationship
peak
29. When consumers substitute a similar - lower priced product for a product which is relatively more expensive.
purchasing power
stagflation
substitution effect
opportunity cost
30. 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.
perfectly elastic
monopoly
trade surplus
susbtitute goods
31. The price of a domestic currency in terms of a foreign currency.
market demand curve
exchange rate
number of composition of consumers
inelastic demand
32. Government officials make decisions about economy.
trough
real GDP
command economy
unemployed
33. The amount of money available to consumers to purchase goods and services.
SRAS curve
demand
purchasing power
inflation
34. 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.
Marginal Propensity to Save (MPS)
national income (NI)
opportunity cost
labor force
35. A country has a trade surplus if the value of its commodity exports exceeds the value of its commodity imports.
inferior good
inverse relationship
trade surplus
consumer surplus
36. A law stating that as an additional unit of a particular food is consumed the utility (satisfaction) gained decreases.
diminishing marginal utility
movement along a demand curve
inferior good
business cycle
37. Short-run aggregate supply curve
SRAS curve
Marginal Propensity to Save (MPS)
stagflation
unit elastic
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
movement along a demand curve
economic aggregates
substitution effect
expansionary monetary policy
39. The deliberate control of the money supply by the Federal government.
Marginal Propensity to Save (MPS)
monetary policy
marginal revenue
opportunity cost
40. The willingness and ability of buyers to purchase a good or service.
complimentary goods
government expenditures
Labor
demand
41. Significantly responsive to a change in price.
real GDP
fiscal policy
required reserve ratio (RRR)
elastic
42. A curve defining the relationship between real production and price level.
aggregate supply curve
interest
economics
LRAS curv
43. The dollar value of all the goods and services sold to house holds.
demand-pull inflation
consumption expenditures
susbtitute goods
opportunity cost
44. The highest point of a business cycle.
peak
scarcity
trade deficit
frictional unemployment
45. 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
unemployment rate
inelastic
quantity exchanged
46. 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).
scarcity
stagflation
cost-push inflation
market economy
47. The long-run pattern of growth and recession.
complimentary goods
elastic
neutral good
business cycle
48. The difference between the maximum price a consume is (or would be) willing to pay and the price he or she actually pays.
consumer surplus
aggregate demand curve
resource
elastic
49. The conflict between limited resources and unlimited human wants; the basic economic problem facing all societies.
scarcity
inflation
expansionary monetary policy
demand elasticity
50. Price control set when the market price is believed to be too high.
demand-pull inflation
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
Labor
price ceiling