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AP Macroeconomics

Subjects : economics, ap
  • 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 dollar value of goods and services sold to governments.

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

3. 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).

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

5. The amount of money available to consumers to purchase goods and services.

6. A table showing quantities of a good demanded at varying prices; a table demonstrating the number of units of a good demanded at various points.

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

8. States that as the price of a good increases - the quantity supplied of a good increases - and as the price of a good decreases - the quantity supplied of the good decreases.

9. When the percent of change in quantity demanded is greater than the percent of change in price; when there is a large change in the quantity of a good demanded - and a small change in price of the good.

10. Movement up or down a single demand curve - contrasted with movement of the demand curve itself.

11. 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

12. Significantly responsive to a change in price.

13. 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.

14. The effort of workers.

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

16. Rising prices - across the board.

17. The transition point between economic recession and recovery.

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

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

20. 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.

21. The efforts of entrepreneurs in organizing resources for production taking risk to create new enterprises and innovating to develop new product.

22. 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

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

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

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

26. 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.

27. The branch of economics that deals with human behavior and choices as they relate to the entire economy.

28. 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.

29. Occurs when supply and demand are balanced such that the market price and the quantity exchanged are under no market pressure to change.

30. A country has a trade surplus if the value of its commodity exports exceeds the value of its commodity imports.

31. 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

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

33. 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.

34. 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

35. A way of measuring the GDP by adding up all spending on final goods and services during a given year.

36. 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.

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

38. (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.

39. 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.

40. 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.

41. The highest point of a business cycle.

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

43. 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).

44. The dollar value of production by a country's citizens.

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

46. A period of slow economic growth - usually accompanied by rising unemployment; two consecutive quarters of declining output.

47. Anything that shows the economy as a whole.

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

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

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