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AP Macroeconomics

Subjects : economics, ap
  • Answer 50 questions in 15 minutes.
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  • Match each statement with the correct term.
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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. When consumers substitute a similar - lower priced product for a product which is relatively more expensive.

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

3. The effort of workers.

4. Resource is unavailable in sufficient amounts to satisfy various ways society wants to use it.

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

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

7. Goods that go together - if price ? the demand for both that good and complimentary good ?.

8. 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

9. 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.

10. 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).

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

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

13. Goods that compete with one another. If the price for one goes up the demand for the other will go up.

14. The dollar value of production by a country's citizens.

15. Expenditure by businesses on plant and equipment and the change in business invention.

16. Economic tool used to determine exactly the amount of the new demand deposits that can be created from an initial deposit.

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

18. A measure of the price level - or the average level of prices.

19. Short-run aggregate supply curve

20. 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.

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

22. 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.

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

24. A shift of the demand curve resulting from a change in consumer taste and preferences.

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

26. 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

27. The deliberate control of the money supply by the Federal government.

28. 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).

29. The branch of economics that deals with human behavior and choices as they relate to the entire economy.

30. 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

31. 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.

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

33. The conflict between limited resources and unlimited human wants; the basic economic problem facing all societies.

34. 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.

35. A relationship between two factors in which the factors move in opposite directions. ex: price increases - then quantity decreases.

36. 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.

37. When the price of one currency falls relative to another currency - the first currency has depreciated relative to the other one.

38. Price control set when the market price is believed to be too high.

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

40. 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.

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

42. 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.

43. The lowest point of a business cycle

44. 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

45. A country has a trade deficit if the value of its commodity imports exceeds the value of its commodity exports.

46. A period of slow economic growth - usually accompanied by rising unemployment; two consecutive quarters of declining output.

47. The amount of a good actually sold.

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. When Price and TR move in opposite directions..... P?/TR? or P?/TR?

50. Unemployment that reflects changes in the business cycle; the difference between the official unemployment rate & the natural rate of unemployment.