AP Macroeconomics Exam Questions Correct Answers Current Update (A+ Pass)
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AP Macroeconomics
Institution
AP Macroeconomics
AP Macroeconomics Exam Questions Correct Answers Current Update (A+ Pass)
Economics - Answers - The social science that studies how individuals, institutions, and society make the optimal best choices under conditions of scarcity
Microeconomics - Answers - Specific units in the economy (ex: h...
AP Macroeconomics Exam Questions
Correct Answers Current Update (A+
Pass)
Economics - Answers -✔✔ The social science that studies how individuals, institutions,
and society make the optimal best choices under conditions of scarcity
Microeconomics - Answers -✔✔ Specific units in the economy (ex: how prices and
output are determined for products and how customers react to price changes)d
Macroeconomics - Answers -✔✔ the study of economy-wide phenomena, including
inflation, unemployment, and economic growth
Positive Economics - Answers -✔✔ Investigates facts or cause-and-effect
relationships; the right answer
Normative Economics - Answers -✔✔ Objective views of what ought to be or what
policies should be used to address an economic issue
Production Possibilities Curve (PPC) - Answers -✔✔ A graph that shows the various
combinations of output that the economy can produce of two products, given the
available factors of production and the available production technology.
Budget Line - Answers -✔✔ A line that shows the different combinations of two
products a consumer can purchase with a specific money income, given the products'
prices.
Land - Answers -✔✔ Natural resources
Labor - Answers -✔✔ The contributed time and abilities of people who are producing
goods and services
Capital - Answers -✔✔ The machines, tools, and equipment used to make other goods
and services
Laizzez-Faire Economics - Answers -✔✔ An economic system where government
should not interfere in the marketplace
Command System - Answers -✔✔ A method of organizing an economy in which
property resources are publicly owned and government uses central economic planning
to direct and coordinate economic activities; command economy; communism
, Market System - Answers -✔✔ All the product and resource markets of a market
economy and the relationships among them; a method that allows the prices
determined in those markets to allocate the economy's scarce resources and to
communicate and coordinate the decisions made by consumers, firms, and resource
suppliers
Circular Flow Diagram - Answers -✔✔
Economic System - Answers -✔✔ A set of institutions and a coordinating mechanism
to respond to the economizing problem for an economy
Competition - Answers -✔✔ The struggle among producers for the dollars of
consumers
Market - Answers -✔✔ Any arrangement that allows buyers and sellers to exchange
things
Division of Labor/Specialization - Answers -✔✔ When workers devote themselves to
doing what they're best at, increasing the efficiency of the firm and of the economy
Money - Answers -✔✔ Anything that serves as a medium of exchange, a unit of
account, and a store of value
"Invisible Hand" - Answers -✔✔ The term economists use to describe the self-
regulating nature of the marketplace
Households - Answers -✔✔ One or more persons occupying a housing unit
Businesses - Answers -✔✔ Economic entities (firms) that purchase resources and
provide goods and services to the economy.
Sole Proprietorship - Answers -✔✔ Business owned and operated by a single person
Corporation - Answers -✔✔ A business owned by stockholders who share in its profits
but are not personally responsible for its debts
Product Market - Answers -✔✔ The market in which households purchase the goods
and services that firms produce
Resource Market - Answers -✔✔ A market in which households sell and firms buy
resources or the services of resources
Demand - Answers -✔✔ Consumer willingness and ability to buy products
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