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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. The income earned by households and profits earned by firms after subtracting.
inferior good
nominal GDP
economics
national income (NI)
2. The amount of money available to consumers to purchase goods and services.
purchasing power
national economic accounts
interest
expansion
3. 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
elastic
economics
elastic demand
rule of 70
4. The transition point between economic recession and recovery.
Marginal Propensity to Save (MPS)
depreciation
trough
peak
5. The cost of something in terms of what one must give up to get it.
inflation
national income (NI)
A decrease in TR following an increase in price = elastic demand
opportunity cost
6. A country has a trade deficit if the value of its commodity imports exceeds the value of its commodity exports.
market supply curve
direct relationship
unemployed
trade deficit
7. The price of a domestic currency in terms of a foreign currency.
exchange rate
recession
inelastic demand
complimentary goods
8. Anything that can be used to produce something else
inflation
resource
land
consumer surplus
9. When the percent of change in the quantity demanded equals the percent of change in price.
unit elastic
demand
demand schedule
business cycle
10. A way of measuring the GDP by adding up all spending on final goods and services during a given year.
LRAS curv
expenditure approach
labor force
scarce
11. Law stating that as a price of a good increases - the quantity demanded of the good decreases - and vice versa.
price ceiling
SRAS curve
structural unemployment
law of demand
12. The sum of all the quantities of a good supplies by all producers at each price.
market supply curve
trade surplus
rule of 70
law of supply
13. The efforts of entrepreneurs in organizing resources for production taking risk to create new enterprises and innovating to develop new product.
trade deficit
stagflation
entrepreneurship
consumer taste and preferences
14. 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).
fiscal policy
unemployment rate
demand curve
changes in consumer expectations
15. 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
business cycles
unemployment rate
law of demand
national economic accounts
16. The deliberate control of the money supply by the Federal government.
monetary policy
aggregate demand curve
demand curve
national economic accounts
17. An industry structure in which there is only one seller for a product.
national economic accounts
monopoly
direct relationship
trade deficit
18. States that as the price of a good increases - the quantity supplied of a good increases - and as the price of a good decreases - the quantity supplied of the good decreases.
land
law of supply
hyperinflation
direct relationship
19. Not significantly responsive to changes in price.
cost-push inflation
consumer taste and preferences
normal good
inelastic
20. A specific percentage of checking account deposits that each bank must keep in liquid - zero-interest reserves; this amount is set by the Fed.
hyperinflation
scarcity
required reserve ratio (RRR)
inferior good
21. Expenditure by businesses on plant and equipment and the change in business invention.
direct relationship
investment expenditures
normal good
marginal propensity to consume (MPC)
22. 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
total revenue
market equilibrium
expansionary monetary policy
price ceiling
23. 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.
government expenditures
entrepreneurship
elastic demand
perfectly elastic
24. Short-run aggregate supply curve
entrepreneurship
labor force
Phillips curve
SRAS curve
25. Graphic representation of an inverse relationship between wage growth (percentage change in price level - such as inflation) and unemployment.
Phillips curve
depression
tariff
national economic accounts
26. Resource is unavailable in sufficient amounts to satisfy various ways society wants to use it.
rule of 70
inverse relationship
disposable personal income
scarce
27. 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.
frictional unemployment
cyclical unemployment
business cycles
simple money multiplier
28. The dollar value of all the goods and services sold to house holds.
SRAS curve
command economy
consumption expenditures
movement along a demand curve
29. The study of scarcity and choice.
economics
land
structural unemployment
direct relationship
30. The highest point of a business cycle.
peak
number of composition of consumers
structural unemployment
business cycles
31. The dollar value of production by a country's citizens.
substitution effect
Gross National Product
fiscal policy
quantity exchanged
32. Government officials make decisions about economy.
unemployed
direct relationship
command economy
fiscal policy
33. 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 consume (MPC)
tariff
consumer surplus
labor force
34. Price control set when the market price is believed to be too high.
expansionary fiscal policy
price ceiling
oligopoly
disposable personal income
35. When Price and TR move in opposite directions..... P?/TR? or P?/TR?
labor force
A decrease in TR following an increase in price = elastic demand
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
monopoly
36. The proportion of each additional dollar of income that will go toward consumption expenditures.
trough
aggregate supply curve
peak
marginal propensity to consume (MPC)
37. Total revenue (TR) price of a good multiplied by the number of units sold; TR = P*Q.
structural unemployment
interest
economics
total revenue
38. The long-run pattern of growth and recession.
SRAS curve
unemployed
demand
business cycle
39. 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.
stagflation
exchange rate
unit elastic
consumer good
40. Economic tool used to determine exactly the amount of the new demand deposits that can be created from an initial deposit.
law of supply
economic aggregates
money multiplier
price index
41. 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.
interest
marginal revenue
structural unemployment
demand curve shifts
42. 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.
A decrease in TR following an increase in price = elastic demand
demand schedule
Phillips curve
market demand curve
43. 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).
price ceiling
monopoly
expansionary monetary policy
cost-push inflation
44. 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.
expansionary fiscal policy
exchange rate
LRAS curv
perfectly elastic
45. A period of slow economic growth - usually accompanied by rising unemployment; two consecutive quarters of declining output.
individual choice
demand-pull inflation
complimentary goods
recession
46. Results an increase in the demand for normal goods and a decrease in the demand for inferior goods.
Gross National Product
consumer income rise
depreciation
marginal revenue
47. Long- run aggregate supply curve
LRAS curv
cost-push inflation
price index
real GDP
48. The proportion of each additional dollar of income that is saved.
consumer surplus
Marginal Propensity to Save (MPS)
unemployed
elastic demand
49. Fluctuations in real GDP around the trend value; also called economic fluctuations.
trough
business cycles
depression
unit elastic
50. When the price of one currency falls relative to another currency - the first currency has depreciated relative to the other one.
business cycles
normal good
inelastic demand
depreciation