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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 relationship between two factors in which the factors move in the same direction.
stagflation
expansionary fiscal policy
depreciation
direct relationship
2. A bad depressingly prolonged recession in economic activity.
trade deficit
depression
trough
import quotas
3. Period in which the economy moves from a trough to a peak and a real GDP is increasing; also called a boom.
unemployed
peak
expansionary monetary policy
expansion
4. The addition to total revenue created by selling one additional unit of ouput.
neutral good
marginal revenue
monopoly
LRAS curv
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).
consumption expenditures
marginal propensity to consume (MPC)
cost-push inflation
labor force
6. Not significantly responsive to changes in price.
demand schedule
expenditure approach
inelastic
business cycles
7. A way of measuring the GDP by adding up all spending on final goods and services during a given year.
interest
rule of 70
consumer taste and preferences
expenditure approach
8. The highest point of a business cycle.
consumption expenditures
peak
market supply curve
recession
9. 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
nominal GDP
expenditure approach
oligopoly
unit elastic
10. Graphic representation of an inverse relationship between wage growth (percentage change in price level - such as inflation) and unemployment.
trough
frictional unemployment
microeconomics
Phillips curve
11. 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.
monopoly
inflation
perfectly elastic
LRAS curv
12. The amount of money available to consumers to purchase goods and services.
unemployment rate
market economy
purchasing power
total revenue
13. 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.
inelastic demand
inflation
diminishing marginal utility
structural unemployment
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).
unemployment rate
command economy
law of demand
neutral good
15. Changes - adjustments - and strategies that the governments implements in spending or taxation to achieve particular economic goals.
fiscal policy
Labor
import quotas
Gross Domestic Product
16. 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
rule of 70
SRAS curve
direct relationship
investment expenditures
17. The transition point between economic recession and recovery.
fiscal policy
consumption expenditures
elastic demand
trough
18. 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.
change in quantity demanded
inelastic demand
market economy
money multiplier
19. Unemployment that reflects changes in the business cycle; the difference between the official unemployment rate & the natural rate of unemployment.
cyclical unemployment
recession
unemployment rate
market economy
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
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
price index
real GDP
consumption expenditures
21. The dollar value of production by a country's citizens.
business cycle
cyclical unemployment
Gross National Product
expenditure approach
22. The efforts of entrepreneurs in organizing resources for production taking risk to create new enterprises and innovating to develop new product.
entrepreneurship
Marginal Propensity to Save (MPS)
expansion
trough
23. 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.
government expenditures
SRAS curve
stagflation
money multiplier
24. Decisions by individuals about what to do and what not to do.
trough
expenditure approach
purchasing power
individual choice
25. Fluctuations in real GDP around the trend value; also called economic fluctuations.
disposable personal income
business cycles
change in quantity demanded
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
26. Resource is unavailable in sufficient amounts to satisfy various ways society wants to use it.
Marginal Propensity to Save (MPS)
demand elasticity
scarce
expansionary fiscal policy
27. 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
purchasing power
change in quantity demanded
unemployed
A decrease in TR following an increase in price = elastic demand
28. Price control set when the market price is believed to be too high.
labor force
inelastic
price ceiling
elastic demand
29. A very high rate of inflation - under which prices go up very rapidly - often more than 1 -000 percent in a year. This causes money to become a poor store of value.
consumer taste and preferences
business cycles
hyperinflation
demand curve shifts
30. When consumers substitute a similar - lower priced product for a product which is relatively more expensive.
market supply curve
substitution effect
consumer taste and preferences
expenditure approach
31. Goods that compete with one another. If the price for one goes up the demand for the other will go up.
susbtitute goods
price index
diminishing marginal utility
change in quantity demanded
32. 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
movement along a demand curve
recession
law of demand
depression
33. When the percent of change in the quantity demanded equals the percent of change in price.
inelastic
demand curve shifts
total revenue
unit elastic
34. 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.
law of supply
purchasing power
demand curve shifts
opportunity cost
35. The difference between the maximum price a consume is (or would be) willing to pay and the price he or she actually pays.
macroeconomics
elastic
consumer surplus
monopoly
36. A special tax imposed on imported goods.
cyclical unemployment
tariff
unemployed
expansionary fiscal policy
37. The lowest point of a business cycle
changes in consumer expectations
demand elasticity
substitution effect
trough
38. Rising prices - across the board.
marginal revenue
nominal GDP
inflation
elastic demand
39. A specific percentage of checking account deposits that each bank must keep in liquid - zero-interest reserves; this amount is set by the Fed.
market economy
required reserve ratio (RRR)
trade surplus
price ceiling
40. A comprehensive group of statistics that measures various aspects of the economy's performance - net exports exports minus imports.
A decrease in TR following an increase in price = elastic demand
scarcity
law of supply
national economic accounts
41. Law stating that as a price of a good increases - the quantity demanded of the good decreases - and vice versa.
LRAS curv
aggregate supply curve
purchasing power
law of demand
42. An increase in the price level
inflation
economic aggregates
demand elasticity
susbtitute goods
43. The study of scarcity and choice.
market equilibrium
consumer taste and preferences
economics
microeconomics
44. 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.
law of supply
simple money multiplier
Phillips curve
interest
45. The branch of economics that deals with human behavior and choices as they relate to the entire economy.
macroeconomics
real GDP
command economy
market equilibrium
46. Consumer income rise - demand will rise.
neutral good
scarcity
total revenue
Gross National Product
47. Long- run aggregate supply curve
demand curve shifts
trade surplus
LRAS curv
aggregate supply curve
48. Expenditure by businesses on plant and equipment and the change in business invention.
investment expenditures
disposable personal income
diminishing marginal utility
consumer income rise
49. The deliberate control of the money supply by the Federal government.
monetary policy
marginal revenue
expansionary monetary policy
normal good
50. 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
normal good
economic aggregates
expansionary monetary policy
unit elastic