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






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






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






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






5. Short-run aggregate supply curve






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






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






8. 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.






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






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






11. The income of households after taxes have been paid






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






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






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






15. When the percent of change in the quantity demanded equals the percent of change in price.






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






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






18. The price of a domestic currency in terms of a foreign currency.






19. Period in which the economy moves from a trough to a peak and a real GDP is increasing; also called a boom.






20. An increase in the price level






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






22. The effort of workers.






23. A specific percentage of checking account deposits that each bank must keep in liquid - zero-interest reserves; this amount is set by the Fed.






24. 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.






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






26. 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.






27. Not significantly responsive to changes in price.






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






29. 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.






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






31. 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.






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






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






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






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






37. Long- run aggregate supply curve






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






39. 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.






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






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






42. Law stating that as a price of a good increases - the quantity demanded of the good decreases - and vice versa.






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






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






45. 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.






46. 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.






47. Fluctuations in real GDP around the trend value; also called economic fluctuations.






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 lowest point of a business cycle






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







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