AP MACROECONOMICS FINAL EXAM QUESTIONS AND ANSWERS 100% PASS

AP MACROECONOMICS FINAL EXAM QUESTIONS AND ANSWERS 100% PASS economics - ..., the study of how society manages its scarce resources scarcity - ...not enough to go around resources - ...simple things that satisfy human wants, used to make other things ceteris paribus - ..., all other things held constant trade-offs - ..., all the alternatives that we give up whenever we choose one course of action over another macroeconomics - ...the study of aggregate economic variables. And the national and global economy microeconomics - ...study of decisions individual businesses make marginal - ...additional command economy - ...central authority makes decisions on production and consumption. (Soviet Union) positive economics - ..., An approach to economics that seeks to understand behavior and the operation of systems without making judgments. It describes what exists and how it works. 2 | P a g e Emily Charlene © 2025, All Rights Reserved. normative economics - ..., the part of economics involving value judgments about what the economy should be like; focused on which economic goals and policies should be implemented; policy economics land - ...production resources from nature. (water trees) pay rent. labor - ...human resources. (physical effort, knowledge and skills). Pay wages, salary. capital - ...produced tools of the trade. (buildings, machines, tools). pay interest. entrepreneurship - ...the intelligence, imagination and ability to take risks needed to start up and maintain a business (Bill Gates). profit. market economy - producers and consumers decide what is made, how much, and for whom. full employment - ...all resources are being used efficiently full production - ..., our nations resources are being allocated in the most efficient manner possible consumer vs. capital goods - ...consumer goods are:shoes food, clothes. capital goods are man-made tools of production: a fishing boat, a machine. production possibilities curve - ... illustrates trade-offs and the optimum efficiency opportunity cost - ...what must be given up to get what you want economic growth - ...expansion of the production possibilities frontier. economic system - ...how the questions "what to produce?", "how to produce it?" and "For whom is it produced?" traditional economy - ..economic decisions made based on what has always been done. traditions. circular flow model - ...represents transactions in an economy demand (curve) - graphed demand schedule 3 | P a g e Emily Charlene © 2025, All Rights Reserved. demand schedule - ...how much consumers will be willing and able to buy at all different price levels Quantity demanded - ...actual amount consumers are willing and able to buy at a specific price law of demand - ...at a higher price, less is demanded. factors of demand - TRIBE Tastes Related goods (price) Income # of Buyers price Expectations normal goods - a rise in income increases the demand for inferior goods - a rise in income decreases the demand for