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Test your basic knowledge |
AP Macroeconomics
Start Test
Study First
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. A country has a trade deficit if the value of its commodity imports exceeds the value of its commodity exports.
investment expenditures
exchange rate
trade deficit
cyclical unemployment
2. The deliberate control of the money supply by the Federal government.
simple money multiplier
diminishing marginal utility
import quotas
monetary policy
3. 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).
expansionary fiscal policy
demand curve
import quotas
opportunity cost
4. 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.
entrepreneurship
business cycle
simple money multiplier
A decrease in TR following an increase in price = elastic demand
5. Anything that shows the economy as a whole.
market demand curve
opportunity cost
price index
economic aggregates
6. The branch of economics that deals with human behavior and choices as they relate to the entire economy.
macroeconomics
expansionary monetary policy
opportunity cost
total revenue
7. Fluctuations in real GDP around the trend value; also called economic fluctuations.
market supply curve
consumer good
national economic accounts
business cycles
8. The income of households after taxes have been paid
demand curve
hyperinflation
disposable personal income
neutral good
9. A Latin phrase meaning 'all things constant.'
normal good
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
market demand curve
consumer good
10. 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.
demand curve shifts
elastic demand
trough
rule of 70
11. When consumers substitute a similar - lower priced product for a product which is relatively more expensive.
substitution effect
exchange rate
price floor
direct relationship
12. A shift in the demand curve resulting from consumer expectations regarding future income or future price of Goods and Services.
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
consumer good
changes in consumer expectations
labor force
13. 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
nominal GDP
Phillips curve
business cycles
demand curve
14. The addition to total revenue created by selling one additional unit of ouput.
market economy
marginal revenue
expansionary monetary policy
Gross Domestic Product
15. The difference between the maximum price a consume is (or would be) willing to pay and the price he or she actually pays.
Marginal Propensity to Save (MPS)
consumer surplus
susbtitute goods
perfectly elastic
16. 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
hyperinflation
unemployed
nominal GDP
price index
17. Total revenue (TR) price of a good multiplied by the number of units sold; TR = P*Q.
total revenue
microeconomics
trough
unit elastic
18. The conflict between limited resources and unlimited human wants; the basic economic problem facing all societies.
government expenditures
scarcity
trough
depression
19. Long- run aggregate supply curve
frictional unemployment
microeconomics
scarcity
LRAS curv
20. 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).
neutral good
market demand curve
Marginal Propensity to Save (MPS)
fiscal policy
21. A shift of the demand curve resulting from a change in consumer taste and preferences.
consumer taste and preferences
number of composition of consumers
trade surplus
elastic demand
22. The payment that capital receives in the factor market.
law of demand
total revenue
disposable personal income
interest
23. Goods that go together - if price ? the demand for both that good and complimentary good ?.
command economy
unit elastic
complimentary goods
cyclical unemployment
24. When the percent of change in the quantity demanded equals the percent of change in price.
money multiplier
normal good
unit elastic
substitution effect
25. The highest point of a business cycle.
peak
substitution effect
inverse relationship
hidden unemployment
26. Period in which a recession becomes prolonged and deep - involving high unemployment.
peak
monopoly
depression
elastic demand
27. 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.
required reserve ratio (RRR)
interest
marginal propensity to consume (MPC)
hyperinflation
28. The willingness and ability of buyers to purchase a good or service.
demand
Gross Domestic Product
expansionary fiscal policy
A decrease in TR following an increase in price = elastic demand
29. The amount of money available to consumers to purchase goods and services.
price index
stagflation
purchasing power
frictional unemployment
30. 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.
consumption expenditures
tariff
opportunity cost
inferior good
31. Unemployment that reflects changes in the business cycle; the difference between the official unemployment rate & the natural rate of unemployment.
cyclical unemployment
inflation
required reserve ratio (RRR)
trade deficit
32. (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.
monetary policy
number of composition of consumers
total revenue
aggregate supply curve
33. The lowest point of a business cycle
marginal revenue
demand
trough
Marginal Propensity to Save (MPS)
34. A relationship between two factors in which the factors move in opposite directions. ex: price increases - then quantity decreases.
structural unemployment
inverse relationship
economic aggregates
depression
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.
law of supply
demand curve shifts
A decrease in TR following an increase in price = elastic demand
business cycles
36. Restrictions on the quantity of a good that can be imported
expansionary fiscal policy
demand curve
import quotas
SRAS curve
37. Economic tool used to determine exactly the amount of the new demand deposits that can be created from an initial deposit.
money multiplier
demand curve
individual choice
price index
38. A comprehensive group of statistics that measures various aspects of the economy's performance - net exports exports minus imports.
individual choice
expansionary monetary policy
national economic accounts
tariff
39. The dollar value of production within a nation's border.
money multiplier
aggregate supply curve
demand curve
Gross Domestic Product
40. A curve defining the relationship between real production and price level.
disposable personal income
aggregate supply curve
Gross National Product
structural unemployment
41. 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.
perfectly elastic
market economy
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
consumer good
42. Changes - adjustments - and strategies that the governments implements in spending or taxation to achieve particular economic goals.
oligopoly
change in quantity demanded
inelastic
fiscal policy
43. 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.
opportunity cost
change in quantity demanded
disposable personal income
market supply curve
44. The graphical representation of the law of demand. Shows the amount of a good buyers are willing and able to buy at various prices.
susbtitute goods
scarcity
demand curve
normal good
45. The long-run pattern of growth and recession.
depression
business cycle
number of composition of consumers
nominal GDP
46. The amount of a good actually sold.
quantity exchanged
interest
consumer taste and preferences
perfectly elastic
47. Decisions by individuals about what to do and what not to do.
individual choice
perfectly elastic
price index
structural unemployment
48. The proportion of each additional dollar of income that will go toward consumption expenditures.
marginal propensity to consume (MPC)
neutral good
unemployed
Marginal Propensity to Save (MPS)
49. Anything that can be used to produce something else
market demand curve
entrepreneurship
expansionary fiscal policy
resource
50. The income earned by households and profits earned by firms after subtracting.
macroeconomics
normal good
national income (NI)
complimentary goods