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Test your basic knowledge |
AP Macroeconomics
Start Test
Study First
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.
market supply curve
national economic accounts
marginal revenue
complimentary goods
2. The proportion of each additional dollar of income that will go toward consumption expenditures.
marginal propensity to consume (MPC)
trough
Labor
import quotas
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
structural unemployment
nominal GDP
depreciation
interest
4. A relationship between two factors in which the factors move in opposite directions. ex: price increases - then quantity decreases.
macroeconomics
inverse relationship
cost-push inflation
elastic demand
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.
tariff
perfectly elastic
economic aggregates
law of supply
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
complimentary goods
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
real GDP
perfectly elastic
7. A period of slow economic growth - usually accompanied by rising unemployment; two consecutive quarters of declining output.
labor force
trade surplus
oligopoly
recession
8. Period in which the economy moves from a trough to a peak and a real GDP is increasing; also called a boom.
elastic demand
expansionary fiscal policy
trade surplus
expansion
9. A bad depressingly prolonged recession in economic activity.
labor force
monetary policy
business cycle
depression
10. The dollar value of production within a nation's border.
business cycles
Gross Domestic Product
changes in consumer expectations
frictional unemployment
11. The cost of something in terms of what one must give up to get it.
depression
opportunity cost
import quotas
structural unemployment
12. Expenditure by businesses on plant and equipment and the change in business invention.
inelastic
expenditure approach
investment expenditures
national economic accounts
13. A Latin phrase meaning 'all things constant.'
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
law of demand
consumption expenditures
susbtitute goods
14. Decisions of individual producers and consumers determine what how and for whom to reduce. Minor Government interference. Economy is run by itself.
diminishing marginal utility
import quotas
market economy
command economy
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
inferior good
rule of 70
marginal revenue
susbtitute goods
16. A good the demand for which rises as income rises and falls as income falls; consumer income rises and demand rises.
normal good
hidden unemployment
macroeconomics
national economic accounts
17. Occurs when supply and demand are balanced such that the market price and the quantity exchanged are under no market pressure to change.
movement along a demand curve
land
market equilibrium
aggregate demand curve
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
change in quantity demanded
monetary policy
hyperinflation
expansionary monetary policy
19. The branch of economics that deals with human behavior and choices as they relate to the entire economy.
trade deficit
simple money multiplier
macroeconomics
consumer taste and preferences
20. A country has a trade deficit if the value of its commodity imports exceeds the value of its commodity exports.
trade deficit
price floor
demand-pull inflation
unit elastic
21. Rising prices - across the board.
susbtitute goods
inflation
trade surplus
consumer income rise
22. The highest point of a business cycle.
peak
price ceiling
depreciation
market demand curve
23. The proportion of each additional dollar of income that is saved.
opportunity cost
A decrease in TR following an increase in price = elastic demand
Marginal Propensity to Save (MPS)
inflation
24. A country has a trade surplus if the value of its commodity exports exceeds the value of its commodity imports.
market demand curve
trade surplus
economic aggregates
LRAS curv
25. Results an increase in the demand for normal goods and a decrease in the demand for inferior goods.
consumer income rise
land
quantity exchanged
inverse relationship
26. A special tax imposed on imported goods.
SRAS curve
tariff
consumer good
Gross National Product
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
labor force
A decrease in TR following an increase in price = elastic demand
law of demand
investment expenditures
28. Changes - adjustments - and strategies that the governments implements in spending or taxation to achieve particular economic goals.
LRAS curv
purchasing power
fiscal policy
opportunity cost
29. Price control set when the market price is believed to be too low.
inflation
inelastic demand
price index
price floor
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.
Labor
market supply curve
required reserve ratio (RRR)
change in quantity demanded
31. A curve defining the relationship between real production and price level.
price index
scarce
marginal propensity to consume (MPC)
aggregate supply curve
32. Resource is unavailable in sufficient amounts to satisfy various ways society wants to use it.
scarce
Labor
monopoly
demand
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.
elastic demand
government expenditures
aggregate demand curve
consumer surplus
34. Goods that go together - if price ? the demand for both that good and complimentary good ?.
complimentary goods
inelastic demand
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
scarcity
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.
national economic accounts
government expenditures
stagflation
depression
36. Short-run aggregate supply curve
opportunity cost
market supply curve
SRAS curve
number of composition of consumers
37. The deliberate control of the money supply by the Federal government.
expansionary fiscal policy
opportunity cost
monetary policy
change in quantity demanded
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).
unit elastic
exchange rate
unemployment rate
expansion
39. Decisions by individuals about what to do and what not to do.
individual choice
Labor
trade deficit
unemployment rate
40. Total revenue (TR) price of a good multiplied by the number of units sold; TR = P*Q.
required reserve ratio (RRR)
total revenue
direct relationship
depreciation
41. The amount of a good actually sold.
depreciation
expansionary fiscal policy
market equilibrium
quantity exchanged
42. Economic tool used to determine exactly the amount of the new demand deposits that can be created from an initial deposit.
demand curve shifts
demand schedule
money multiplier
movement along a demand curve
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.
unemployment rate
demand-pull inflation
business cycle
elastic demand
44. The payment that capital receives in the factor market.
normal good
interest
trough
command economy
45. The dollar value of all the goods and services sold to house holds.
hidden unemployment
consumption expenditures
inflation
structural unemployment
46. An increase in the price level
price index
diminishing marginal utility
inflation
entrepreneurship
47. A law stating that as an additional unit of a particular food is consumed the utility (satisfaction) gained decreases.
peak
consumer good
purchasing power
diminishing marginal utility
48. The transition point between economic recession and recovery.
Marginal Propensity to Save (MPS)
price index
expenditure approach
trough
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).
cost-push inflation
macroeconomics
simple money multiplier
demand-pull inflation
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.
susbtitute goods
oligopoly
opportunity cost
trough