Test your basic knowledge |

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






2. 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






3. The proportion of each additional dollar of income that is saved.






4. The effort of workers.






5. The study of scarcity and choice.






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






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






8. Rising prices - across the board.






9. 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.






10. The transition point between economic recession and recovery.






11. Expenditure by businesses on plant and equipment and the change in business invention.






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






13. A bad depressingly prolonged recession in economic activity.






14. A country has a trade surplus if the value of its commodity exports exceeds the value of its commodity imports.






15. 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.






16. Unemployment that reflects changes in the business cycle; the difference between the official unemployment rate & the natural rate of unemployment.






17. 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.






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






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






20. Significantly responsive to a change in price.






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






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






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






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






26. A special tax imposed on imported goods.






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






28. The deliberate control of the money supply by the Federal government.






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






30. The amount of a good actually sold.






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






32. A comprehensive group of statistics that measures various aspects of the economy's performance - net exports exports minus imports.






33. 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.






34. Government officials make decisions about economy.






35. 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.






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






37. 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






38. Restrictions on the quantity of a good that can be imported






39. Price control set when the market price is believed to be too high.






40. 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.






41. 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






42. 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).






43. 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.






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






45. When Price and TR move in opposite directions..... P?/TR? or P?/TR?






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






47. 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.






48. A person who has been unemployed and searching for a job for so long - that they have given up on finding a job and therefore forfeit unemployment.






49. 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






50. 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).