Test your basic knowledge |

AP Macroeconomics

Subjects : economics, ap
  • 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. Fluctuations in real GDP around the trend value; also called economic fluctuations.

2. The willingness and ability of buyers to purchase a good or service.

3. 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

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

5. A curve defining the relationship between real production and price level.

6. A bad depressingly prolonged recession in economic activity.

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

8. The addition to total revenue created by selling one additional unit of ouput.

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

10. Changes - adjustments - and strategies that the governments implements in spending or taxation to achieve particular economic goals.

11. A shift in the demand curve resulting from consumer expectations regarding future income or future price of Goods and Services.

12. Long- run aggregate supply curve

13. Short-run aggregate supply curve

14. The proportion of each additional dollar of income that is saved.

15. Significantly responsive to a change in price.

16. The amount of a good actually sold.

17. Period in which a recession becomes prolonged and deep - involving high unemployment.

18. The sum of all the quantities of a good supplies by all producers at each price.

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

20. 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.

21. (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.

22. 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.

23. Law stating that as a price of a good increases - the quantity demanded of the good decreases - and vice versa.

24. 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

25. Anything from the land and/or nature. Ex: minerals - timber - petroleum - cotton.

26. 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).

27. Restrictions on the quantity of a good that can be imported

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

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

30. The price of a domestic currency in terms of a foreign currency.

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

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

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

34. When the percent of change in the quantity demanded equals the percent of change in price.

35. 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

36. 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.

37. 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.

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

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

40. An increase in the price level

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

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

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

44. Anything that can be used to produce something else

45. 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.

46. A law stating that as an additional unit of a particular food is consumed the utility (satisfaction) gained decreases.

47. The amount of money available to consumers to purchase goods and services.

48. Decisions of individual producers and consumers determine what how and for whom to reduce. Minor Government interference. Economy is run by itself.

49. 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).

50. 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.