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






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






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






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






5. 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).






6. Rising prices - across the board.






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






8. 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.






9. 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.






10. 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.






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






12. 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.






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






14. A bad depressingly prolonged recession in economic activity.






15. 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






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






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






18. 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.






19. 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).






20. The amount of a good actually sold.






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






22. 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?






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






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






25. The highest point of a business cycle.






26. 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.






27. 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.






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






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






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






31. 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).






32. Short-run aggregate supply curve






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






34. The lowest point of a business cycle






35. Consumer income rise - demand will rise.






36. The graphical representation of the law of demand. Shows the amount of a good buyers are willing and able to buy at various prices.






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






38. The group of individuals who are either working or actively looking for work; the labor force includes the unemployed: labor force = number of individuals in labor force/number of individuals in the adult population - expressed as a percentage.






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






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






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






42. (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.






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






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






45. An increase in the price level






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






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






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






49. 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






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