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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.
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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 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.






2. 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.






3. The highest point of a business cycle.






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






5. The study of scarcity and choice.






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






7. The difference between the maximum price a consume is (or would be) willing to pay and the price he or she actually pays.






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






9. 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?






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






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






12. 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.






13. A shift of the demand curve resulting from a change in consumer taste and preferences.






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






15. Goods that go together - if price ? the demand for both that good and complimentary good ?.






16. 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).






17. 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.






18. The proportion of each additional dollar of income that will go toward consumption expenditures.






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






20. Long- run aggregate supply curve






21. 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).






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






23. (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.






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






25. The payment that capital receives in the factor market.






26. 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






27. Law stating that as a price of a good increases - the quantity demanded of the good decreases - and vice versa.






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






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






30. 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.






31. 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).






32. Consumer income rise - demand will rise.






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






34. The effort of workers.






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






36. Government officials make decisions about economy.






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






38. Significantly responsive to a change in price.






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






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






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






42. Anything from the land and/or nature. Ex: minerals - timber - petroleum - cotton.






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






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. The long-run pattern of growth and recession.






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






47. 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.






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






49. A comprehensive group of statistics that measures various aspects of the economy's performance - net exports exports minus imports.






50. 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