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AP Macroeconomics

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. 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.






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






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






4. 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.






5. A special tax imposed on imported goods.






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






7. A Latin phrase meaning 'all things constant.'






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






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






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






11. 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.






12. Not significantly responsive to changes in price.






13. 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.






14. A bad depressingly prolonged recession in economic activity.






15. The lowest point of a business cycle






16. (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.






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






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






19. Long- run aggregate supply curve






20. 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






21. An increase or decrease in consumer income will cause a shift in the Demand Curve.






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






23. 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.






24. 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






25. 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






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






27. An increase in the price level






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






29. When consumers substitute a similar - lower priced product for a product which is relatively more expensive.






30. 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.






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






32. Government officials make decisions about economy.






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






34. 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.






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






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






37. Short-run aggregate supply curve






38. 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






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






40. The willingness and ability of buyers to purchase a good or service.






41. Significantly responsive to a change in price.






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






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






44. The highest point of a business cycle.






45. 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).






46. 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).






47. The long-run pattern of growth and recession.






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






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






50. Price control set when the market price is believed to be too high.