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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. The income earned by households and profits earned by firms after subtracting.
economics
depression
opportunity cost
national income (NI)
2. 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.
frictional unemployment
demand curve shifts
monetary policy
aggregate demand curve
3. The deliberate control of the money supply by the Federal government.
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
direct relationship
monetary policy
elastic demand
4. 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.
purchasing power
unemployment rate
fiscal policy
perfectly elastic
5. The conflict between limited resources and unlimited human wants; the basic economic problem facing all societies.
market demand curve
price ceiling
exchange rate
scarcity
6. The long-run pattern of growth and recession.
marginal propensity to consume (MPC)
business cycle
price floor
cost-push inflation
7. Unemployment that reflects changes in the business cycle; the difference between the official unemployment rate & the natural rate of unemployment.
consumer good
opportunity cost
cyclical unemployment
aggregate demand curve
8. A measure of the price level - or the average level of prices.
price floor
changes in consumer expectations
peak
price index
9. The proportion of each additional dollar of income that will go toward consumption expenditures.
oligopoly
expansionary monetary policy
scarce
marginal propensity to consume (MPC)
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).
aggregate demand curve
hidden unemployment
cost-push inflation
nominal GDP
11. Inflation that follows from an increase in aggregate demand - which will cause equilibrium real GDP (Y) to increase and the equilibrium price level (P) to increase.
inflation
demand-pull inflation
government expenditures
exchange rate
12. A Latin phrase meaning 'all things constant.'
inelastic demand
disposable personal income
Ceteris Paribus (sayr-iht-us pahr-ih-bos)
resource
13. 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.
trough
normal good
stagflation
resource
14. Anything that shows the economy as a whole.
rule of 70
economic aggregates
market demand curve
microeconomics
15. 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
resource
real GDP
law of supply
microeconomics
16. The difference between the maximum price a consume is (or would be) willing to pay and the price he or she actually pays.
number of composition of consumers
SRAS curve
consumer surplus
market demand curve
17. 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
changes in consumer expectations
expansionary monetary policy
government expenditures
hyperinflation
18. The amount of a good actually sold.
diminishing marginal utility
Gross Domestic Product
market equilibrium
quantity exchanged
19. An increase or decrease in consumer income will cause a shift in the Demand Curve.
cyclical unemployment
microeconomics
hidden unemployment
consumer good
20. A shift of the demand curve resulting from a change in consumer taste and preferences.
inverse relationship
consumer taste and preferences
total revenue
simple money multiplier
21. Occurs when supply and demand are balanced such that the market price and the quantity exchanged are under no market pressure to change.
expansionary monetary policy
opportunity cost
market equilibrium
depreciation
22. The amount of money available to consumers to purchase goods and services.
SRAS curve
economics
hyperinflation
purchasing power
23. Price control set when the market price is believed to be too high.
individual choice
depression
hyperinflation
price ceiling
24. The branch of economics that deals with human behavior and choices as they relate to the entire economy.
oligopoly
scarcity
trough
macroeconomics
25. A comprehensive group of statistics that measures various aspects of the economy's performance - net exports exports minus imports.
national economic accounts
elastic demand
scarce
aggregate demand curve
26. Anything that can be used to produce something else
price index
direct relationship
economic aggregates
resource
27. 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.
economic aggregates
hyperinflation
substitution effect
market supply curve
28. Significantly responsive to a change in price.
oligopoly
elastic
national income (NI)
diminishing marginal utility
29. Fluctuations in real GDP around the trend value; also called economic fluctuations.
business cycles
Marginal Propensity to Save (MPS)
expenditure approach
number of composition of consumers
30. A shift in the demand curve resulting from consumer expectations regarding future income or future price of Goods and Services.
recession
consumer taste and preferences
expansionary monetary policy
changes in consumer expectations
31. Period in which a recession becomes prolonged and deep - involving high unemployment.
monetary policy
depression
demand curve
diminishing marginal utility
32. The income of households after taxes have been paid
disposable personal income
nominal GDP
marginal propensity to consume (MPC)
law of supply
33. Resource is unavailable in sufficient amounts to satisfy various ways society wants to use it.
scarce
depreciation
expenditure approach
demand schedule
34. 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
scarcity
Gross National Product
neutral good
35. Consumer income rise - demand will rise.
demand curve
microeconomics
neutral good
nominal GDP
36. Anything from the land and/or nature. Ex: minerals - timber - petroleum - cotton.
unit elastic
business cycle
import quotas
land
37. A specific percentage of checking account deposits that each bank must keep in liquid - zero-interest reserves; this amount is set by the Fed.
price index
national income (NI)
required reserve ratio (RRR)
inflation
38. The graphical representation of the law of demand. Shows the amount of a good buyers are willing and able to buy at various prices.
market equilibrium
A decrease in TR following an increase in price = elastic demand
inelastic
demand curve
39. Restrictions on the quantity of a good that can be imported
perfectly elastic
import quotas
demand curve shifts
price ceiling
40. 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.
Gross Domestic Product
microeconomics
national income (NI)
simple money multiplier
41. When the price of one currency falls relative to another currency - the first currency has depreciated relative to the other one.
depreciation
consumption expenditures
movement along a demand curve
peak
42. An increase in the price level
opportunity cost
inflation
tariff
perfectly elastic
43. 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.
rule of 70
cyclical unemployment
aggregate demand curve
oligopoly
44. 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
import quotas
depression
real GDP
law of demand
45. Period in which the economy moves from a trough to a peak and a real GDP is increasing; also called a boom.
expansion
scarcity
macroeconomics
law of demand
46. Total revenue (TR) price of a good multiplied by the number of units sold; TR = P*Q.
total revenue
inferior good
Labor
unemployment rate
47. 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.
trough
land
import quotas
inferior good
48. 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.
expansion
command economy
susbtitute goods
law of supply
49. A period of slow economic growth - usually accompanied by rising unemployment; two consecutive quarters of declining output.
recession
demand curve
neutral good
peak
50. Movement up or down a single demand curve - contrasted with movement of the demand curve itself.
expansionary fiscal policy
stagflation
depreciation
movement along a demand curve