Test your basic knowledge |

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. The highest point of a business cycle.






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






3. The study of scarcity and choice.






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






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






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






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






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






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






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






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






12. A special tax imposed on imported goods.






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






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






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






16. A bad depressingly prolonged recession in economic activity.






17. A country has a trade deficit if the value of its commodity imports exceeds the value of its commodity exports.






18. 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






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






20. 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.






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






22. Real cost of an item is its opportunity cost.






23. An increase in the price level






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






25. Expenditure by businesses on plant and equipment and the change in business invention.






26. 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.






27. Significantly responsive to a change in price.






28. 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.






29. 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






30. A relationship between two factors in which the factors move in the same direction.






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






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






33. 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.






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






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






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






37. Anything that shows the economy as a whole.






38. Goods that compete with one another. If the price for one goes up the demand for the other will go up.






39. The effort of workers.






40. Rising prices - across the board.






41. 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.






42. Consumer income rise - demand will rise.






43. Short-run aggregate supply curve






44. 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.






45. 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.






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






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






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






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






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