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AP Macroeconomics

Subjects : economics, ap
Instructions:
  • 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. The graphical representation of the law of demand. Shows the amount of a good buyers are willing and able to buy at various prices.






2. Consumer income rise - demand will rise.






3. 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






4. 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.






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






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






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






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






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






10. 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.






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






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






13. Short-run aggregate supply curve






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






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






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






17. A special tax imposed on imported goods.






18. 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.






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






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






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. When the percent of change in quantity demanded is greater than the percent of change in price; when there is a large change in the quantity of a good demanded - and a small change in price of the good.






23. The lowest point of a business cycle






24. Unemployment that reflects changes in the business cycle; the difference between the official unemployment rate & the natural rate of unemployment.






25. 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






26. The income of households after taxes have been paid






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






28. When the percent of change in the quantity demanded is less than then percent of change in price; when there is a small change in the quantity of a good demanded - and a large change in the price of the good.






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






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






31. 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






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






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






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






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






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






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






38. 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).






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






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






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






42. Rising prices - across the board.






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






44. The transition point between economic recession and recovery.






45. An increase in the price level






46. A way of measuring the GDP by adding up all spending on final goods and services during a given year.






47. (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.






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






49. 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.






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







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