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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. Occurs when supply and demand are balanced such that the market price and the quantity exchanged are under no market pressure to change.
disposable personal income
trough
market equilibrium
substitution effect
2. The dollar value of all the goods and services sold to house holds.
opportunity cost
consumption expenditures
unit elastic
monetary policy
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.
expansionary fiscal policy
neutral good
demand-pull inflation
purchasing power
4. An industry structure in which there is only one seller for a product.
tariff
inflation
diminishing marginal utility
monopoly
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.
demand curve
consumer surplus
inelastic
business cycle
6. A special tax imposed on imported goods.
changes in consumer expectations
peak
tariff
market supply curve
7. The addition to total revenue created by selling one additional unit of ouput.
land
economic aggregates
marginal revenue
disposable personal income
8. The amount of a good actually sold.
quantity exchanged
demand schedule
inverse relationship
aggregate supply curve
9. The effort of workers.
consumer taste and preferences
land
Labor
quantity exchanged
10. 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).
trade surplus
expansionary fiscal policy
cost-push inflation
Gross National Product
11. Resource is unavailable in sufficient amounts to satisfy various ways society wants to use it.
susbtitute goods
movement along a demand curve
scarce
Phillips curve
12. 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).
scarcity
inflation
Gross National Product
expansionary fiscal policy
13. A bad depressingly prolonged recession in economic activity.
depression
depreciation
expansionary fiscal policy
elastic demand
14. The dollar value of production within a nation's border.
expansionary fiscal policy
interest
Gross Domestic Product
fiscal policy
15. 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.
change in quantity demanded
marginal revenue
frictional unemployment
stagflation
16. Decisions of individual producers and consumers determine what how and for whom to reduce. Minor Government interference. Economy is run by itself.
market economy
labor force
consumer taste and preferences
interest
17. A country has a trade deficit if the value of its commodity imports exceeds the value of its commodity exports.
resource
SRAS curve
trade deficit
entrepreneurship
18. A specific percentage of checking account deposits that each bank must keep in liquid - zero-interest reserves; this amount is set by the Fed.
expenditure approach
required reserve ratio (RRR)
labor force
business cycles
19. Economic tool used to determine exactly the amount of the new demand deposits that can be created from an initial deposit.
law of demand
peak
exchange rate
money multiplier
20. 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.
aggregate demand curve
expansionary fiscal policy
LRAS curv
price floor
21. A Latin phrase meaning 'all things constant.'
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
nominal GDP
expansion
purchasing power
22. A relationship between two factors in which the factors move in opposite directions. ex: price increases - then quantity decreases.
business cycles
unemployment rate
peak
inverse relationship
23. 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).
disposable personal income
demand schedule
market demand curve
consumer good
24. When the percent of change in the quantity demanded equals the percent of change in price.
monopoly
demand-pull inflation
cost-push inflation
unit elastic
25. 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.
diminishing marginal utility
investment expenditures
stagflation
changes in consumer expectations
26. A market with only a few sellers - each offering a product that is largely the same as the others' products; in an oligopoly - there is always a tension between cooperation and competition.
oligopoly
trough
marginal revenue
expenditure approach
27. (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.
demand-pull inflation
inverse relationship
number of composition of consumers
monopoly
28. When consumers substitute a similar - lower priced product for a product which is relatively more expensive.
macroeconomics
individual choice
inflation
substitution effect
29. The lowest point of a business cycle
substitution effect
expenditure approach
trough
resource
30. The income of households after taxes have been paid
perfectly elastic
disposable personal income
demand elasticity
SRAS curve
31. 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?
peak
demand elasticity
Marginal Propensity to Save (MPS)
marginal revenue
32. The efforts of entrepreneurs in organizing resources for production taking risk to create new enterprises and innovating to develop new product.
national economic accounts
disposable personal income
entrepreneurship
recession
33. Short-run aggregate supply curve
depression
consumer good
SRAS curve
fiscal policy
34. The dollar value of goods and services sold to governments.
government expenditures
expansionary monetary policy
cyclical unemployment
direct relationship
35. The sum of all the quantities of a good supplies by all producers at each price.
hyperinflation
scarce
susbtitute goods
market supply curve
36. The proportion of each additional dollar of income that is saved.
demand
change in quantity demanded
consumer taste and preferences
Marginal Propensity to Save (MPS)
37. Goods that compete with one another. If the price for one goes up the demand for the other will go up.
law of supply
susbtitute goods
peak
marginal propensity to consume (MPC)
38. Long- run aggregate supply curve
LRAS curv
consumer taste and preferences
government expenditures
Marginal Propensity to Save (MPS)
39. Graphic representation of an inverse relationship between wage growth (percentage change in price level - such as inflation) and unemployment.
import quotas
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
price index
Phillips curve
40. Anything that shows the economy as a whole.
economic aggregates
macroeconomics
oligopoly
law of demand
41. 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.
structural unemployment
change in quantity demanded
market equilibrium
A decrease in TR following an increase in price = elastic demand
42. A law stating that as an additional unit of a particular food is consumed the utility (satisfaction) gained decreases.
total revenue
movement along a demand curve
diminishing marginal utility
disposable personal income
43. A good the demand for which rises as income rises and falls as income falls; consumer income rises and demand rises.
demand schedule
demand-pull inflation
normal good
nominal GDP
44. Results an increase in the demand for normal goods and a decrease in the demand for inferior goods.
labor force
inelastic
consumer income rise
inflation
45. 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.
inferior good
scarcity
LRAS curv
simple money multiplier
46. A curve defining the relationship between real production and price level.
rule of 70
marginal propensity to consume (MPC)
monetary policy
aggregate supply curve
47. An increase or decrease in consumer income will cause a shift in the Demand Curve.
market equilibrium
consumer good
stagflation
cost-push inflation
48. Fluctuations in real GDP around the trend value; also called economic fluctuations.
trade surplus
SRAS curve
business cycles
expansion
49. 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.
required reserve ratio (RRR)
SRAS curve
inelastic
perfectly elastic
50. A shift in the demand curve resulting from consumer expectations regarding future income or future price of Goods and Services.
changes in consumer expectations
consumer good
demand curve
cost-push inflation