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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. Real cost of an item is its opportunity cost.
opportunity cost
frictional unemployment
demand
market demand curve
2. A law stating that as an additional unit of a particular food is consumed the utility (satisfaction) gained decreases.
command economy
changes in consumer expectations
perfectly elastic
diminishing marginal utility
3. Price control set when the market price is believed to be too high.
price ceiling
exchange rate
national economic accounts
resource
4. A relationship between two factors in which the factors move in the same direction.
direct relationship
opportunity cost
frictional unemployment
exchange rate
5. Unemployment that reflects changes in the business cycle; the difference between the official unemployment rate & the natural rate of unemployment.
perfectly elastic
cyclical unemployment
inverse relationship
national income (NI)
6. 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).
structural unemployment
opportunity cost
individual choice
expansionary fiscal policy
7. A comprehensive group of statistics that measures various aspects of the economy's performance - net exports exports minus imports.
trade surplus
money multiplier
national income (NI)
national economic accounts
8. A bad depressingly prolonged recession in economic activity.
business cycles
depression
complimentary goods
SRAS curve
9. Graphic representation of an inverse relationship between wage growth (percentage change in price level - such as inflation) and unemployment.
Phillips curve
disposable personal income
quantity exchanged
recession
10. Anything from the land and/or nature. Ex: minerals - timber - petroleum - cotton.
recession
land
complimentary goods
price floor
11. A curve defining the relationship between real production and price level.
scarcity
aggregate supply curve
number of composition of consumers
market supply curve
12. Anything that shows the economy as a whole.
real GDP
national economic accounts
economic aggregates
demand curve shifts
13. An increase in the price level
expansionary fiscal policy
trough
inflation
consumption expenditures
14. A Latin phrase meaning 'all things constant.'
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
normal good
law of supply
market supply curve
15. Period in which the economy moves from a trough to a peak and a real GDP is increasing; also called a boom.
SRAS curve
expansion
demand schedule
purchasing power
16. 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.
trade surplus
hyperinflation
fiscal policy
LRAS curv
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.
simple money multiplier
change in quantity demanded
consumption expenditures
inelastic demand
18. The branch of economics that deals with human behavior and choices as they relate to the entire economy.
total revenue
macroeconomics
consumption expenditures
complimentary goods
19. 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
rule of 70
law of demand
inelastic
resource
20. Total revenue (TR) price of a good multiplied by the number of units sold; TR = P*Q.
total revenue
unit elastic
government expenditures
unemployment rate
21. When consumers substitute a similar - lower priced product for a product which is relatively more expensive.
inverse relationship
substitution effect
inflation
inelastic
22. The dollar value of goods and services sold to governments.
government expenditures
Gross Domestic Product
LRAS curv
opportunity cost
23. Changes - adjustments - and strategies that the governments implements in spending or taxation to achieve particular economic goals.
A decrease in TR following an increase in price = elastic demand
fiscal policy
command economy
quantity exchanged
24. Period in which a recession becomes prolonged and deep - involving high unemployment.
expansion
changes in consumer expectations
depression
monetary policy
25. 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.
expansionary monetary policy
tariff
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
aggregate demand curve
26. 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).
resource
market demand curve
price floor
A decrease in TR following an increase in price = elastic demand
27. The effort of workers.
scarce
complimentary goods
scarcity
Labor
28. The income earned by households and profits earned by firms after subtracting.
real GDP
money multiplier
national income (NI)
inelastic
29. Occurs when supply and demand are balanced such that the market price and the quantity exchanged are under no market pressure to change.
unit elastic
market equilibrium
movement along a demand curve
demand elasticity
30. Not significantly responsive to changes in price.
market equilibrium
purchasing power
inelastic
trade surplus
31. Significantly responsive to a change in price.
price index
law of demand
hyperinflation
elastic
32. 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.
Gross National Product
Labor
microeconomics
national income (NI)
33. The graphical representation of the law of demand. Shows the amount of a good buyers are willing and able to buy at various prices.
substitution effect
required reserve ratio (RRR)
LRAS curv
demand curve
34. 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?
exchange rate
demand elasticity
cyclical unemployment
inflation
35. 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
changes in consumer expectations
demand schedule
inverse relationship
nominal GDP
36. The proportion of each additional dollar of income that will go toward consumption expenditures.
susbtitute goods
real GDP
marginal propensity to consume (MPC)
stagflation
37. Resource is unavailable in sufficient amounts to satisfy various ways society wants to use it.
unemployment rate
Gross Domestic Product
scarce
law of demand
38. The proportion of each additional dollar of income that is saved.
trade surplus
unit elastic
depression
Marginal Propensity to Save (MPS)
39. A measure of the price level - or the average level of prices.
real GDP
exchange rate
price index
fiscal policy
40. The amount of money available to consumers to purchase goods and services.
purchasing power
consumer income rise
macroeconomics
market equilibrium
41. The group of individuals who are either working or actively looking for work; the labor force includes the unemployed: labor force = number of individuals in labor force/number of individuals in the adult population - expressed as a percentage.
economic aggregates
demand curve
individual choice
labor force
42. Expenditure by businesses on plant and equipment and the change in business invention.
exchange rate
investment expenditures
aggregate supply curve
price index
43. 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
demand schedule
A decrease in TR following an increase in price = elastic demand
elastic demand
real GDP
44. The transition point between economic recession and recovery.
trough
national income (NI)
elastic demand
trade deficit
45. 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.
complimentary goods
change in quantity demanded
inferior good
structural unemployment
46. An increase or decrease in consumer income will cause a shift in the Demand Curve.
law of supply
trough
consumer good
price ceiling
47. The amount of a good actually sold.
quantity exchanged
recession
unemployed
demand-pull inflation
48. Anything that can be used to produce something else
microeconomics
resource
consumer surplus
demand schedule
49. The highest point of a business cycle.
scarcity
peak
disposable personal income
inflation
50. A period of slow economic growth - usually accompanied by rising unemployment; two consecutive quarters of declining output.
recession
neutral good
required reserve ratio (RRR)
frictional unemployment