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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. 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.






2. 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.






3. The highest point of a business cycle.






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






5. Consumer income rise - demand will rise.






6. 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






7. Government officials make decisions about economy.






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






9. 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.






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






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






12. Changes - adjustments - and strategies that the governments implements in spending or taxation to achieve particular economic goals.






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






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






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






16. 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.






17. 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






18. 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.






19. The proportion of each additional dollar of income that is saved.






20. Short-run aggregate supply curve






21. 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).






22. 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.






23. The income of households after taxes have been paid






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






25. 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






26. A market with only a few sellers - each offering a product that is largely the same as the others' products; in an oligopoly - there is always a tension between cooperation and competition.






27. A measure of the price level - or the average level of prices.






28. Decisions of individual producers and consumers determine what how and for whom to reduce. Minor Government interference. Economy is run by itself.






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






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






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






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






33. A special tax imposed on imported goods.






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






35. The effort of workers.






36. 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






37. 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.






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






39. 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






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






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






42. The lowest point of a business cycle






43. Rising prices - across the board.






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






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






46. 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.






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






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






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






50. 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.