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AP Macroeconomics

Subjects : economics, ap
Instructions:
  • Answer 50 questions in 15 minutes.
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  • 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. An increase or decrease in consumer income will cause a shift in the Demand Curve.






2. Real cost of an item is its opportunity cost.






3. A special tax imposed on imported goods.






4. A curve defining the relationship between real production and price level.






5. A specific percentage of checking account deposits that each bank must keep in liquid - zero-interest reserves; this amount is set by the Fed.






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






7. A bad depressingly prolonged recession in economic activity.






8. A relationship between two factors in which the factors move in opposite directions. ex: price increases - then quantity decreases.






9. 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.






10. The addition to total revenue created by selling one additional unit of ouput.






11. 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).






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






13. Restrictions on the quantity of a good that can be imported






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






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






16. 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






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






18. 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.






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






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






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






22. Anything that shows the economy as a whole.






23. A person who has been unemployed and searching for a job for so long - that they have given up on finding a job and therefore forfeit unemployment.






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






25. 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.






26. The dollar value of production within a nation's border.






27. 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.






28. 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






29. The proportion of each additional dollar of income that is saved.






30. 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).






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






32. Not significantly responsive to changes in price.






33. The dollar value of all the goods and services sold to house holds.






34. 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).






35. The transition point between economic recession and recovery.






36. Long- run aggregate supply curve






37. 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






38. A law stating that as an additional unit of a particular food is consumed the utility (satisfaction) gained decreases.






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






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






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






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






43. 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.






44. A civilian - non-institutionalized adult is considered to be unemployed when he or she does not have a job but is actively looking for one; unemployment figures reflect the number of individuals meeting this definition who are parts of the labor forc






45. Short-run aggregate supply curve






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






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






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






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.






50. When Price and TR move in opposite directions..... P?/TR? or P?/TR?







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