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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 specific percentage of checking account deposits that each bank must keep in liquid - zero-interest reserves; this amount is set by the Fed.
LRAS curv
susbtitute goods
required reserve ratio (RRR)
law of demand
2. Goods that compete with one another. If the price for one goes up the demand for the other will go up.
rule of 70
marginal revenue
susbtitute goods
resource
3. The amount of money available to consumers to purchase goods and services.
economics
purchasing power
consumer income rise
national economic accounts
4. Not significantly responsive to changes in price.
inelastic
hidden unemployment
individual choice
market equilibrium
5. Economic tool used to determine exactly the amount of the new demand deposits that can be created from an initial deposit.
national economic accounts
money multiplier
Gross National Product
market economy
6. The proportion of each additional dollar of income that will go toward consumption expenditures.
expansion
command economy
exchange rate
marginal propensity to consume (MPC)
7. Price control set when the market price is believed to be too low.
price floor
Phillips curve
scarce
trade surplus
8. The willingness and ability of buyers to purchase a good or service.
disposable personal income
trade deficit
demand
depression
9. 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
expansionary fiscal policy
trade surplus
law of demand
economic aggregates
10. 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).
cost-push inflation
LRAS curv
expansionary fiscal policy
total revenue
11. The income of households after taxes have been paid
disposable personal income
business cycle
national economic accounts
inflation
12. 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.
perfectly elastic
demand curve shifts
diminishing marginal utility
consumer surplus
13. The proportion of each additional dollar of income that is saved.
inelastic
monopoly
Marginal Propensity to Save (MPS)
demand
14. 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.
movement along a demand curve
inferior good
business cycles
resource
15. 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.
perfectly elastic
demand
purchasing power
susbtitute goods
16. Graphic representation of an inverse relationship between wage growth (percentage change in price level - such as inflation) and unemployment.
Phillips curve
structural unemployment
frictional unemployment
microeconomics
17. The highest point of a business cycle.
direct relationship
monetary policy
Gross Domestic Product
peak
18. 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).
frictional unemployment
nominal GDP
consumer good
market demand curve
19. 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.
rule of 70
recession
inelastic
frictional unemployment
20. 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.
diminishing marginal utility
investment expenditures
simple money multiplier
price ceiling
21. Law stating that as a price of a good increases - the quantity demanded of the good decreases - and vice versa.
aggregate demand curve
disposable personal income
law of demand
depression
22. The efforts of entrepreneurs in organizing resources for production taking risk to create new enterprises and innovating to develop new product.
inverse relationship
expansionary monetary policy
entrepreneurship
consumer good
23. 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.
substitution effect
demand curve
unit elastic
labor force
24. 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
unemployed
expansionary monetary policy
total revenue
substitution effect
25. A comprehensive group of statistics that measures various aspects of the economy's performance - net exports exports minus imports.
trough
LRAS curv
national economic accounts
rule of 70
26. 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
total revenue
economic aggregates
investment expenditures
rule of 70
27. The branch of economics that deals with human behavior and choices as they relate to the entire economy.
macroeconomics
land
diminishing marginal utility
business cycle
28. Consumer income rise - demand will rise.
inverse relationship
marginal revenue
neutral good
inflation
29. 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
LRAS curv
inflation
consumer surplus
nominal GDP
30. The long-run pattern of growth and recession.
price ceiling
tariff
cost-push inflation
business cycle
31. Occurs when supply and demand are balanced such that the market price and the quantity exchanged are under no market pressure to change.
disposable personal income
trade surplus
diminishing marginal utility
market equilibrium
32. A country has a trade deficit if the value of its commodity imports exceeds the value of its commodity exports.
depreciation
elastic demand
trade deficit
movement along a demand curve
33. A shift in the demand curve resulting from consumer expectations regarding future income or future price of Goods and Services.
changes in consumer expectations
interest
SRAS curve
hidden unemployment
34. The deliberate control of the money supply by the Federal government.
quantity exchanged
depression
monetary policy
opportunity cost
35. (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.
depression
number of composition of consumers
change in quantity demanded
law of demand
36. Price control set when the market price is believed to be too high.
hidden unemployment
Gross National Product
demand-pull inflation
price ceiling
37. An industry structure in which there is only one seller for a product.
monetary policy
oligopoly
monopoly
import quotas
38. 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.
scarce
total revenue
structural unemployment
stagflation
39. A relationship between two factors in which the factors move in the same direction.
land
direct relationship
microeconomics
change in quantity demanded
40. Restrictions on the quantity of a good that can be imported
Gross Domestic Product
number of composition of consumers
import quotas
inferior good
41. The amount of a good actually sold.
total revenue
hidden unemployment
quantity exchanged
diminishing marginal utility
42. The dollar value of production by a country's citizens.
peak
change in quantity demanded
economics
Gross National Product
43. Long- run aggregate supply curve
government expenditures
substitution effect
tariff
LRAS curv
44. Anything that can be used to produce something else
expenditure approach
resource
tariff
Labor
45. Government officials make decisions about economy.
elastic
national income (NI)
command economy
interest
46. The dollar value of goods and services sold to governments.
monopoly
depression
government expenditures
Labor
47. Total revenue (TR) price of a good multiplied by the number of units sold; TR = P*Q.
total revenue
fiscal policy
demand-pull inflation
hidden unemployment
48. The study of scarcity and choice.
economics
land
oligopoly
trough
49. When consumers substitute a similar - lower priced product for a product which is relatively more expensive.
resource
substitution effect
frictional unemployment
cyclical unemployment
50. The dollar value of all the goods and services sold to house holds.
consumption expenditures
Labor
structural unemployment
susbtitute goods