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AP Econ MIDTERM REVIEW Fall 2024 Flashcards | StudBud
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AP Econ MIDTERM REVIEW Fall 2024
AP Econ MIDTERM REVIEW Fall 2024
40 terms
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An #economics #review over units 1-3 of a #high #school #AP #Economics class.
Flashcards
40 cards
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Practice quiz
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Questions
40
Answers
1
What is unemployment?
A retired person
A stay at home mom or dad
A person not physically capable of working
A person without a job but is looking for one.
2
What are the components of aggregate demand?
Government Spending and Consumption
Consumption and Net Exports
Consumption, Investments, Government Spending, and Net Exports
Consumption and Investments
3
What can shift the short-run aggregate supply curve?
Changes in nominal wages
All of the above
Changes in productivity
Changes in commodity prices
4
Inflation is a prolonged rise in the price of goods and services
False
True
5
Comparative advantage occurs when a country can:
Produce more of a good
Produce a good for a lower opportunity cost
Produce a good for a higher opportunity cost
Produce less of a good
6
Which of the following would best portray long-term economic growth?
a leftward shift of the short run aggregate supply curve
a leftward shift of the production possibilities curve
a rightward shift of the long run aggregate supply curve
a rightward shift of the aggregate demand curve
7
Consumer price index
Uses the spending multiplier to determine GDP
Measures total spending in a household or workplace
Measures changes in the average level of prices of goods over time
Measures changes in the currency by analyzing other economies
8
When a country can produce a product with a lower opportunity cost, it's called...
GDP
Comparative Advantage
Absolute Advantage
Money Supply
9
Structural unemployment is:
when people get laid off when the season changes
when people choose to. move from one job to another
when worker skills don't match available jobs
unemployment that rises with a bad economy
10
Describe the AS curve in the Long Run
Always horizontal
Always vertical
Always upward sloping
Always downward sloping
11
If MPC is .9, the spending multiplier is
6
9
10
8
12
Interest rates represent
capital goods
what you owe
the cost of borrowing
the cost of spending
13
The labor force includes
employed and unemployed people
permanent but not temporary employees
Da Baby
full-time but not part-time workers
14
labor force participation rate
the percentage of the working-age population in the labor force
the total number of workers, including both the employed and the unemployed
number of unemployed/labor force x 100
People who are actively looking for work.
15
When aggregate demand > aggregate supply
Push-demand inflation
Pull-demand inflation
Demand-push inflation
Demand-pull inflation
16
Long-term economic growth can occur with all of the below except?
increase in the quantity of resources
increase in consumer spending
increase in the quality of resources
increase in technological advancements
17
Market Equilibrium for a product occurs when...
quantity consumers demands equals quantity producers supply
producer supply does not meet consumer demand
quantity producers demand is lower than consumers supply
consumer demand does not meet producer supply
18
Aggregate demand shifts left when the government
cuts military expenditures.
decreases taxes.
Both of the above are correct.
None of the above is correct.
19
Capital Goods
Things that are useful.
Goods consumers buy
Things that that are used to make other things.
The costs of production
20
The natural rate of unemployment is :
The sum of frictional and cyclical unemployment
the sum of seasonal and frictional unemployment
The sum of cyclical, seasonal and underemployment
The sum of structural and frictional unemployment
21
What is opportunity cost?
The opportunity to go shopping.
What you give up when you make a choice.
What you pay for with a credit card.
The cost of a good or service.
22
What should the Gov't do if the economy is experiencing high Inflation?
Decrease Spending and Increase Taxes
Increase Gov't Spending and Decrease Taxes
Decrease Gov't Spending and Decrease Taxes
None of the above
23
Long run aggregate supply reflects when...
When labor costs are variable
When all costs of production are fixed
When all costs of production are variable
When one of more costs of production are fixed
24
During a period of recession, which fiscal policy tool would be prescribed?
raise interest rates
raise income taxes
lower interest rates
increase government spending
25
Fiscal policy refers to:
the adjustment of GDP for inflation
action by Congress to overrule budget cuts by the president
government spending & taxation
the purchase & sale of US gov't securities
26
If the nominal interest rate is 10% and the inflation rate is 6%, the real interest rate is
4%
-10%
-4%
6%
27
Expansionary Fiscal Policy results in what?
Increased money supply
Shifting AD to the left
Shifting AS to the right
Shifting AD to the right
28
When the supply of a good is low, and the demand is high, what usually happens to the price of the good?
It doesn't change.
It depends on the item.
It goes up.
It goes down.
29
Tax Multiplier
Spending multiplier - 1
Nominal GDP/Real GDP
(Market Basket CY/Market Basket BY) x 100
1/MPS
30
Long run aggregate supply curve
represents full employment
all the answers
represents potential GDP
is vertical
31
Nominal income = $1,200 and the GDP price deflator is 120. Calculate real GDP.
$10
$100
$1,000
$144,000
32
What is the business cycle???
The way businesses trade their goods for services.
The cycle where the factors of production are exchanged
The cycle of how businesses and consumers interact
Intervals of expansion followed by recession in economic activity.
33
How does inflation impact the money in your savings account?
Inflation decreases only the $ you earn in interest
The purchasing power of your money decreases over time
Inflation has no impact on $ in your savings account.
Inflation increases the value of the money in your account
34
Automatic Stabilizer
government's attempt to stabilize the economy through taxing, govt spending
policy that does not require a new or special action to take effect
The ultimate ab crunch workout
policy that would increase tax revenue and decrease spending
35
Nominal GDP = Real GDP * GDP Deflator
True
False
36
A supply shock:
moves our economy along the LRAS curve
shifts the AD curve
shifts AD but not the PPC
shifts the SRAS curve
37
What can lead to higher inflation?
An increase in demand for goods and services
An increase in prices of imported goods
A decrease in the supply of goods and services
All answers are correct
38
Stagflation is a combination of _____ unemployment and _____ inflation.
decreasing; increasing
increasing; decreasing
increasing; increasing
decreasing; decreasing
39
What shifts aggregate demand to the right?
Rise in consumption
decrease in government spending
Fall in net trade
fall in prices
40
Cost-Push Inflation...
High prices because of producer's input costs rise
Prices are decreasing because of demand from customers
Low prices because of producer's cost to create
High prices because of demand from customers
