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AP Macroeconomics

Subjects : economics, ap
  • 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. Period in which the economy moves from a trough to a peak and a real GDP is increasing; also called a boom.

2. 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

3. Resource is unavailable in sufficient amounts to satisfy various ways society wants to use it.

4. 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).

5. 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.

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

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

8. Can be measured by using TR as a gauge; a decrease in TR following an increase in Price = Elastic Demand - When Price and TR move in opposite directions..... P?/TR? or P?/TR?

9. 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

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

11. 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

12. 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.

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

14. Government officials make decisions about economy.

15. 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

16. 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

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

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

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

20. A shift of the demand curve resulting from a change in consumer taste and preferences.

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

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

23. Movement up or down a single demand curve - contrasted with movement of the demand curve itself.

24. Anything that shows the economy as a whole.

25. The study of scarcity and choice.

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

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

28. The amount of a good actually sold.

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

30. Anything that can be used to produce something else

31. 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.

32. Unemployment faced by workers who have lost their jobs because of changing market (demand) conditions & whose skills don't match the requirements of available jobs.

33. (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.

34. Not significantly responsive to changes in price.

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

36. Consumer income rise - demand will rise.

37. 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.

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

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

40. A special tax imposed on imported goods.

41. 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.

42. The highest point of a business cycle.

43. 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).

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

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

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

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

48. 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.

49. 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

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