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






2. The amount of money available to consumers to purchase goods and services.






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






4. The transition point between economic recession and recovery.






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






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






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






8. Anything that can be used to produce something else






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






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






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






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






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






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).






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






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






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






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.






19. Not significantly responsive to changes in price.






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.






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






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






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.






24. Short-run aggregate supply curve






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






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






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.






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






29. The study of scarcity and choice.






30. The highest point of a business cycle.






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






32. Government officials make decisions about economy.






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






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






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






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






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






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






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.






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






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.






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.






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).






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.






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






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






47. Long- run aggregate supply curve






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






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






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