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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. 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.
rule of 70
demand curve shifts
complimentary goods
expansionary fiscal policy
2. Changes - adjustments - and strategies that the governments implements in spending or taxation to achieve particular economic goals.
number of composition of consumers
inverse relationship
fiscal policy
price ceiling
3. Total revenue (TR) price of a good multiplied by the number of units sold; TR = P*Q.
total revenue
price ceiling
number of composition of consumers
Gross National Product
4. A comprehensive group of statistics that measures various aspects of the economy's performance - net exports exports minus imports.
national economic accounts
law of demand
law of demand
law of supply
5. The income of households after taxes have been paid
macroeconomics
disposable personal income
elastic demand
total revenue
6. When consumers substitute a similar - lower priced product for a product which is relatively more expensive.
import quotas
substitution effect
scarce
command economy
7. The amount of a good actually sold.
hidden unemployment
quantity exchanged
scarcity
Marginal Propensity to Save (MPS)
8. 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.
national income (NI)
perfectly elastic
money multiplier
nominal GDP
9. The branch of economics that deals with human behavior and choices as they relate to the entire economy.
oligopoly
LRAS curv
inflation
macroeconomics
10. Fluctuations in real GDP around the trend value; also called economic fluctuations.
business cycles
oligopoly
fiscal policy
demand schedule
11. The dollar value of production by a country's citizens.
Gross National Product
rule of 70
neutral good
aggregate demand curve
12. When the percent of change in the quantity demanded equals the percent of change in price.
demand curve
hyperinflation
unit elastic
expenditure approach
13. 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.
diminishing marginal utility
frictional unemployment
individual choice
required reserve ratio (RRR)
14. (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.
elastic
number of composition of consumers
A decrease in TR following an increase in price = elastic demand
cost-push inflation
15. Occurs when supply and demand are balanced such that the market price and the quantity exchanged are under no market pressure to change.
market equilibrium
simple money multiplier
total revenue
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
16. Law stating that as a price of a good increases - the quantity demanded of the good decreases - and vice versa.
law of demand
scarcity
hyperinflation
disposable personal income
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.
national income (NI)
change in quantity demanded
purchasing power
diminishing marginal utility
18. Goods that go together - if price ? the demand for both that good and complimentary good ?.
diminishing marginal utility
law of demand
complimentary goods
command economy
19. 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
trough
depression
rule of 70
20. The transition point between economic recession and recovery.
opportunity cost
business cycles
hidden unemployment
trough
21. The dollar value of all the goods and services sold to house holds.
consumption expenditures
A decrease in TR following an increase in price = elastic demand
law of supply
rule of 70
22. 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
law of demand
real GDP
neutral good
scarce
23. Government officials make decisions about economy.
inverse relationship
law of demand
macroeconomics
command economy
24. 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.
consumer surplus
structural unemployment
quantity exchanged
unemployed
25. Results an increase in the demand for normal goods and a decrease in the demand for inferior goods.
demand-pull inflation
business cycles
scarcity
consumer income rise
26. 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.
peak
expansion
LRAS curv
simple money multiplier
27. 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
expenditure approach
simple money multiplier
expansionary monetary policy
normal good
28. Economic tool used to determine exactly the amount of the new demand deposits that can be created from an initial deposit.
money multiplier
inflation
A decrease in TR following an increase in price = elastic demand
simple money multiplier
29. 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.
structural unemployment
demand-pull inflation
number of composition of consumers
national economic accounts
30. A bad depressingly prolonged recession in economic activity.
microeconomics
cost-push inflation
depression
unemployment rate
31. 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
depreciation
labor force
susbtitute goods
32. The long-run pattern of growth and recession.
trade deficit
normal good
business cycle
Marginal Propensity to Save (MPS)
33. The amount of money available to consumers to purchase goods and services.
market equilibrium
price index
frictional unemployment
purchasing power
34. The proportion of each additional dollar of income that is saved.
Marginal Propensity to Save (MPS)
recession
substitution effect
susbtitute goods
35. The willingness and ability of buyers to purchase a good or service.
demand
perfectly elastic
depreciation
inelastic
36. The addition to total revenue created by selling one additional unit of ouput.
marginal revenue
interest
labor force
substitution effect
37. An increase or decrease in consumer income will cause a shift in the Demand Curve.
trade surplus
consumer good
monetary policy
depression
38. A country has a trade deficit if the value of its commodity imports exceeds the value of its commodity exports.
expansionary fiscal policy
cost-push inflation
trade deficit
trough
39. The income earned by households and profits earned by firms after subtracting.
monetary policy
national income (NI)
expansionary fiscal policy
command economy
40. 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).
cost-push inflation
labor force
price floor
inelastic
41. Period in which the economy moves from a trough to a peak and a real GDP is increasing; also called a boom.
demand schedule
marginal propensity to consume (MPC)
expansion
consumer income rise
42. A way of measuring the GDP by adding up all spending on final goods and services during a given year.
changes in consumer expectations
direct relationship
oligopoly
expenditure approach
43. The proportion of each additional dollar of income that will go toward consumption expenditures.
marginal propensity to consume (MPC)
purchasing power
demand elasticity
import quotas
44. Price control set when the market price is believed to be too low.
frictional unemployment
national economic accounts
demand curve shifts
price floor
45. A special tax imposed on imported goods.
market equilibrium
tariff
aggregate supply curve
demand elasticity
46. The efforts of entrepreneurs in organizing resources for production taking risk to create new enterprises and innovating to develop new product.
scarcity
land
entrepreneurship
price ceiling
47. A country has a trade surplus if the value of its commodity exports exceeds the value of its commodity imports.
quantity exchanged
number of composition of consumers
trade surplus
substitution effect
48. Rising prices - across the board.
interest
national economic accounts
inflation
microeconomics
49. Resource is unavailable in sufficient amounts to satisfy various ways society wants to use it.
scarce
consumer good
demand-pull inflation
law of supply
50. A Latin phrase meaning 'all things constant.'
business cycles
Marginal Propensity to Save (MPS)
number of composition of consumers
Ceteris Paribus (sayr-iht-us pahr-ih-bos)