Study AP Exam

Question 1

Opportunity Cost

Answer 1

the most highly valued opportunity or alternative forfeited when a choice is made

Question 2

Marginal Opportunity Cost

Answer 2

an additional cost to you above those cards already incurred

Question 3

Labor

Answer 3

people who contribute to the production of goods and services
-population growth

Question 4

Capital

Answer 4

Goods that are used to produce other goods and services
-improvements in education, training, health of workers

Question 5

When do borrowers benefit

Answer 5

Unanticipated Inflation
- Money that is paid back will not buy as much as it did

Question 6

When do Lenders benefit

Answer 6

Deflation

Question 7

Negative Supply Shock

Answer 7

SRAS shifts to the left

Question 8

Positive Supply Shock

Answer 8

SRAS shifts to the right

Question 9

Normal Goods

Answer 9

As income rises, demand for goods rises

Question 10

Inferior Goods

Answer 10

As income rises, demand decreases

Question 11

Discount Rate

Answer 11

Interest rate the Fed charges the bank for a loan

Question 12

Federal Funds Rate

Answer 12

Interest rate one bank charges another bank for a loan

Question 13

Demand Pull Inflation

Answer 13

Inflation caused by an increase in AD