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






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






3. 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






4. A relationship between two factors in which the factors move in opposite directions. ex: price increases - then quantity decreases.






5. 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.






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






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






9. A bad depressingly prolonged recession in economic activity.






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






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






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






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






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






15. 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






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






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






18. 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






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






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






21. Rising prices - across the board.






22. The highest point of a business cycle.






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






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






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






26. A special tax imposed on imported goods.






27. 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






28. Changes - adjustments - and strategies that the governments implements in spending or taxation to achieve particular economic goals.






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






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






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






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






33. 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.






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






35. 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.






36. Short-run aggregate supply curve






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






38. 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).






39. Decisions by individuals about what to do and what not to do.






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






41. The amount of a good actually sold.






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






43. 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.






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






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






46. An increase in the price level






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






48. The transition point between economic recession and recovery.






49. 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).






50. 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.