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






2. 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.






3. 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.






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






5. Consumer income rise - demand will rise.






6. 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.






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






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






9. Anything that shows the economy as a whole.






10. Government officials make decisions about economy.






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






12. Rising prices - across the board.






13. The amount of a good actually sold.






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






15. 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.






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






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






18. 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.






19. The lowest point of a business cycle






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






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






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






23. 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






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






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






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






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






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






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






31. 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).






32. 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






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






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






35. Will shift either to the left(decrease) in demand - or to the right(increase) in demand; shift is caused by a change in one of the non-price determinates for the good.






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






38. An increase in the price level






39. The effort of workers.






40. 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.






41. 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.






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






43. 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.






44. The income of households after taxes have been paid






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






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






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






48. 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).






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






50. 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.







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