Saint John's School AP Macroeconomics Review Vocabulary Test Unit 3 PDF

Saint John’s School Social Studies Department Name: Giovannah L. Semper Cabezudo Date: 3/12/2024 Mr. Pedro De Jesús AP Macroeconomics Review Vocabulary Test Unit 3 Directions: Choose the best answer for each questio...

Saint John’s School Social Studies Department Name: Giovannah L. Semper Cabezudo Date: 3/12/2024 Mr. Pedro De Jesús AP Macroeconomics Review Vocabulary Test Unit 3 Directions: Choose the best answer for each question. Write the letter corresponding to your choice. 1. ___What is the value of a household’s accumulated savings called? A. Aggregate demand B. Wealth C. Real wealth effect D. Expenditure multiplier 2. ___What is the investment spending that businesses intend to undertake during a given period? A. Inventory investment B. Planned investment spending C. Marginal propensity to save D. Fiscal policy 3. ___What refers to the value of the change in inventories held in the economy during a given period? A. Inventory investment B. Sticky wages C. Aggregate supply curve D. Demand shock 4. ____What shows the relationship between the aggregate price level and the quantity of aggregate output demanded by households, businesses, the government, and the rest of the world? A. Aggregate supply curve B. Aggregate demand curve C. Long-run aggregate supply curve D. Real wealth effect  a. ___What is the change in consumer spending caused by the altered purchasing power of consumers’ assets? A. Interest rate effect B. Real wealth effect C. Exchange rate effect D. Cost-push inflatio ___What is the change in investment and consumer spending caused by altered interest rates that result from changes in the demand for money? A. Exchange rate effect B. Fiscal policy C. Interest rate effect D. Discretionary fiscal policy 5. ___What describes the change in net exports caused by a change in the value of the domestic currency, leading to a change in the relative price of domestic and foreign goods and services? A. Demand shock B. Exchange rate effect C. Sticky wages D. Tax multiplier 6. ___What is the proportion of an aggregate raise in pay that a consumer spends on the consumption of goods and services? A. Marginal Propensity to Save (MPS) B. Marginal Propensity to Consume (MPC) C. Potential output D. Stagflation 7. ___What is the proportion of a pay raise that a consumer saves rather than spends on immediate consumption? A. Marginal Propensity to Save (MPS) B. Aggregate supply curve C. Marginal Propensity to Consume (MPC) D. Demand shock 8. ___What shows what impact a change in autonomous spending will have on total spending and aggregate demand in the economy? zA. Expenditure Multiplier B. Balanced Budget Multiplier C. Sticky wages D. Short-run aggregate supply curve 9. ___What is the ratio of the total change in real `GDP caused by a change in taxes? A. Fiscal policy B. Tax Multiplier C. Demand-pull inflation D. Supply shock 10. ___What refers to the total quantity of output firms will produce and sell? A. Potential output B. Aggregate supply curve C. Real interest rate D. Short-run aggregate supply curve 11. ___What is the literal amount of money you get paid per hour or by salary? A. Real wage B. Sticky wages zC. Nominal wage D. Potential output 12. ___What describes when workers’ earnings don’t adjust quickly to changes in labor market conditions? zA. Sticky wages B. Nominal wage C. Long-run aggregate supply curve D. Marginal Propensity to Save 13. ___What is the graphical representation of SRAS, showing the positive relationship between the aggregate price level and the quantity of goods and services firms are willing to supply? A. Aggregate demand curve B. Long-run aggregate supply curve zC. Short-run aggregate supply curve D. Potential output 14. ___What is a period in which the price of at least one factor of production cannot change? A. The Long Run B. The Short Run C. Sticky wages D. Demand shock 15. ___What refers to the period when the general price level, contractual wage rates, and expectations adjust fully to the state of the economy? A. The Short Run B. The Long Run C. Aggregate supply curve D. Disinflation 16. ___What is the curve that shows the relationship between price level and real GDP when all prices, including nominal wages, are fully flexible? A. Aggregate demand curve B. Short-run aggregate supply curve zC. Long-run aggregate supply curve D. Cost-push inflation 17. ___What is the maximum amount of goods and services an economy can produce when it is most efficient? A. Full-employment output level B. Potential output C. Real interest rate D. Inventory investment 18. ___What is the production level (RGDP) when all available resources are used efficiently? A. Full-employment output level B. Sticky wages C. Aggregate supply curve D. Expansionary fiscal policy 19. ___What is the interest rate actually paid for a loan? zA. Nominal interest rate B. Real interest rate C. Tax multiplier D. Disinflation 20. ___What is the nominal interest rate minus the rate of inflation? zA. Real interest rate B. Nominal interest rate C. Interest rate effect D. Cost-push inflation 21. ___What is the process of bringing the inflation rate down? A. Stagflation B. Disinflation C. Aggregate demand curve D. Demand shock 22. ___What is a sudden unexpected event that dramatically increases or decreases demand for a product or service, usually temporarily? A. Supply shock B. Demand shock C. Real wealth effect D. Tax multiplier 23. ___What is an unexpected rapid increase or decrease in aggregate supply at any given aggregate price level? A. Supply shock B. Interest rate effect C. Sticky wages D. Nominal interest rate 24. ___What describes persistent high inflation combined with high unemployment and stagnant demand in a country’s economy? A. Cost-push inflation B. Stagflation C. Real interest rate D. Fiscal policy 25. ___What type of inflation occurs when the cost of production increases, leading to higher prices for goods and services? A. Demand-pull inflation B. Cost-push inflation C. Real wealth effect D. Nominal wage 26. ___What type of inflation occurs when demand for goods and services exceeds supply in the economy? A. Demand-pull inflation B. Cost-push inflation C. Discretionary fiscal policy D. Tax multiplier 27. ___What refers to the use of government spending and taxation to influence the economy? A. Automatic stabilizers B. Fiscal policy C. Aggregate supply curve D. Marginal Propensity to Save 28. ___What are policies enacted by a government that often increase or decrease the money supply to make changes to the economy? A. Contractionary fiscal policy B. Expansionary fiscal policy C. Balanced budget multiplier D. Inventory investment 29. ___What describes when the government either cuts spending or raises taxes? A. Expansionary fiscal policy zB. Contractionary fiscal policy C. Sticky wages D. Demand shock 30. ___What implies that if the government increases spending and taxation by the same amount, then equilibrium national income (GDP) rises by this amount? A. Balanced budget multiplier B. Expenditure multiplier C. Fiscal policy D. Aggregate demand curve 31. ___What describes when the government is actively making a change to spending or taxes? A. Discretionary fiscal policy B. Automatic stabilizers C. Cost-push inflation D. Stagflation 32. ___What stabilizes the economy without government or policymaker interference? A. Discretionary fiscal policy B. Automatic stabilizers C. Expansionary fiscal policy D. Supply shock