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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. 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.

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

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

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

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

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

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

8. Consumer income rise - demand will rise.

9. Anything that can be used to produce something else

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

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

12. 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.

13. Long- run aggregate supply curve

14. When the percent of change in the quantity demanded equals the percent of change in price.

15. 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.

16. The effort of workers.

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

18. A bad depressingly prolonged recession in economic activity.

19. 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

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

21. 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).

22. Anything that shows the economy as a whole.

23. The sum of all the quantities of a good supplies by all producers at each price.

24. 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.

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

26. 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).

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

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

29. Not significantly responsive to changes in price.

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

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

32. A good the demand for which rises as income rises and falls as income falls; consumer income rises and demand rises.

33. 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.

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

35. 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.

36. Graphic representation of an inverse relationship between wage growth (percentage change in price level - such as inflation) and unemployment.

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

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

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

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

42. The transition point between economic recession and recovery.

43. The amount of a good actually sold.

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

45. The income of households after taxes have been paid

46. 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).

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

48. 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.

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

50. Economic tool used to determine exactly the amount of the new demand deposits that can be created from an initial deposit.