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 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).






2. 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.






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






4. Not significantly responsive to changes in price.






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






6. 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






7. 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.






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






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






10. 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






11. Anything from the land and/or nature. Ex: minerals - timber - petroleum - cotton.






12. 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






13. The sum of all the quantities of a good supplies by all producers at each price.






14. Anything that shows the economy as a whole.






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






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






17. A bad depressingly prolonged recession in economic activity.






18. The effort of workers.






19. The dollar value of production by a country's citizens.






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).






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






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






23. 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






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






25. 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?






26. 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.






27. 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).






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






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






30. A country has a trade deficit if the value of its commodity imports exceeds the value of its commodity exports.






31. 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






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






33. Rising prices - across the board.






34. The addition to total revenue created by selling one additional unit of ouput.






35. The highest point of a business cycle.






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






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






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






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






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






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






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






43. 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.






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.






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






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






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






48. Long- run aggregate supply curve






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. 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.