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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 study of scarcity and choice.






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






3. 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.






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






5. Government officials make decisions about economy.






6. 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.






7. 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.






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






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






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






11. 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






12. A curve depicting the relationship between real GDP demanded (i.e. - expenditures) and the price level in the economy; the aggregate demand curve slopes downward from left to right.






13. 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






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






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






16. 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.






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






18. The lowest point of a business cycle






19. The income of households after taxes have been paid






20. 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






21. Period in which a recession becomes prolonged and deep - involving high unemployment.






22. Significantly responsive to a change in price.






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






24. 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.






25. Not significantly responsive to changes in price.






26. (population); Then there is a shift in the demand curve resulting from and increase or decrease in market demand - as specific consumption related to demographics is concerned.






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






28. The dollar value of production within a nation's border.






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






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






31. A bad depressingly prolonged recession in economic activity.






32. 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.






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






34. The highest point of a business cycle.






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






36. The effort of workers.






37. The branch of economics that deals with human behavior and choices as they relate to relatively small units--the individual - the business firm - a single market.






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






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






40. 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.






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






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






43. Anything that can be used to produce something else






44. Movement up or down a single demand curve - contrasted with movement of the demand curve itself.






45. A special tax imposed on imported goods.






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






47. 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?






48. 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.






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






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