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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. 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.
trade deficit
law of supply
change in quantity demanded
consumer good
2. 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.
microeconomics
consumption expenditures
tariff
law of demand
3. 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
aggregate demand curve
trough
expansionary monetary policy
rule of 70
4. A relationship between two factors in which the factors move in the same direction.
economics
hyperinflation
opportunity cost
direct relationship
5. Long- run aggregate supply curve
LRAS curv
substitution effect
land
aggregate demand curve
6. 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.
diminishing marginal utility
exchange rate
depreciation
hyperinflation
7. 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.
depreciation
law of demand
aggregate demand curve
neutral good
8. Unemployment that reflects changes in the business cycle; the difference between the official unemployment rate & the natural rate of unemployment.
cyclical unemployment
frictional unemployment
investment expenditures
movement along a demand curve
9. (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.
expansionary fiscal policy
structural unemployment
number of composition of consumers
unit elastic
10. A measure of the price level - or the average level of prices.
marginal propensity to consume (MPC)
inelastic demand
price index
law of demand
11. An increase or decrease in consumer income will cause a shift in the Demand Curve.
business cycle
consumer good
depression
labor force
12. A shift of the demand curve resulting from a change in consumer taste and preferences.
purchasing power
macroeconomics
diminishing marginal utility
consumer taste and preferences
13. The efforts of entrepreneurs in organizing resources for production taking risk to create new enterprises and innovating to develop new product.
import quotas
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
entrepreneurship
market supply curve
14. Real cost of an item is its opportunity cost.
scarce
price floor
demand curve shifts
opportunity cost
15. A period of slow economic growth - usually accompanied by rising unemployment; two consecutive quarters of declining output.
individual choice
recession
total revenue
real GDP
16. Government officials make decisions about economy.
command economy
microeconomics
demand elasticity
oligopoly
17. When consumers substitute a similar - lower priced product for a product which is relatively more expensive.
substitution effect
national economic accounts
opportunity cost
quantity exchanged
18. The proportion of each additional dollar of income that will go toward consumption expenditures.
real GDP
trough
marginal propensity to consume (MPC)
neutral good
19. A specific percentage of checking account deposits that each bank must keep in liquid - zero-interest reserves; this amount is set by the Fed.
required reserve ratio (RRR)
law of demand
cyclical unemployment
import quotas
20. The dollar value of production within a nation's border.
Gross Domestic Product
fiscal policy
tariff
purchasing power
21. Anything that can be used to produce something else
resource
demand-pull inflation
oligopoly
market equilibrium
22. The addition to total revenue created by selling one additional unit of ouput.
cyclical unemployment
expansionary fiscal policy
law of supply
marginal revenue
23. The amount of a good actually sold.
recession
peak
quantity exchanged
aggregate demand curve
24. 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.
inferior good
inflation
market economy
hidden unemployment
25. Movement up or down a single demand curve - contrasted with movement of the demand curve itself.
movement along a demand curve
Gross Domestic Product
national economic accounts
recession
26. Not significantly responsive to changes in price.
consumer taste and preferences
frictional unemployment
trough
inelastic
27. The sum of all the quantities of a good supplies by all producers at each price.
market supply curve
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
individual choice
consumption expenditures
28. The income of households after taxes have been paid
consumer good
marginal revenue
disposable personal income
business cycle
29. Changes - adjustments - and strategies that the governments implements in spending or taxation to achieve particular economic goals.
expenditure approach
substitution effect
inflation
fiscal policy
30. Expenditure by businesses on plant and equipment and the change in business invention.
price floor
investment expenditures
depression
marginal propensity to consume (MPC)
31. The amount of money available to consumers to purchase goods and services.
expansion
marginal revenue
purchasing power
land
32. Unemployment faced by workers who have lost their jobs because of changing market (demand) conditions & whose skills don't match the requirements of available jobs.
tariff
consumption expenditures
inferior good
structural unemployment
33. 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.
quantity exchanged
marginal propensity to consume (MPC)
opportunity cost
labor force
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.
purchasing power
business cycles
demand curve shifts
scarcity
35. Results an increase in the demand for normal goods and a decrease in the demand for inferior goods.
consumer income rise
economics
nominal GDP
national economic accounts
36. 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.
Marginal Propensity to Save (MPS)
simple money multiplier
consumer taste and preferences
Labor
37. Goods that go together - if price ? the demand for both that good and complimentary good ?.
market demand curve
number of composition of consumers
complimentary goods
inferior good
38. Period in which the economy moves from a trough to a peak and a real GDP is increasing; also called a boom.
resource
disposable personal income
law of demand
expansion
39. The lowest point of a business cycle
demand elasticity
trough
price ceiling
cost-push inflation
40. 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.
number of composition of consumers
cyclical unemployment
perfectly elastic
market economy
41. When the percent of change in the quantity demanded equals the percent of change in price.
unit elastic
resource
law of demand
hidden unemployment
42. 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.
elastic demand
changes in consumer expectations
aggregate demand curve
demand schedule
43. Short-run aggregate supply curve
SRAS curve
normal good
import quotas
Gross Domestic Product
44. Fluctuations in real GDP around the trend value; also called economic fluctuations.
business cycles
resource
economic aggregates
government expenditures
45. Graphic representation of an inverse relationship between wage growth (percentage change in price level - such as inflation) and unemployment.
price index
Phillips curve
inelastic demand
command economy
46. The difference between the maximum price a consume is (or would be) willing to pay and the price he or she actually pays.
consumer surplus
LRAS curv
consumption expenditures
unit elastic
47. 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).
expansionary fiscal policy
Phillips curve
price floor
national economic accounts
48. The conflict between limited resources and unlimited human wants; the basic economic problem facing all societies.
price floor
monetary policy
peak
scarcity
49. A shift in the demand curve resulting from consumer expectations regarding future income or future price of Goods and Services.
changes in consumer expectations
structural unemployment
interest
depreciation
50. A person who has been unemployed and searching for a job for so long - that they have given up on finding a job and therefore forfeit unemployment.
hidden unemployment
trough
inferior good
trade surplus