AP Econ Semester 1 Review (Everything I Forgot LMAO)

Substitute goods

Where demand and price move in opposite directions

Complementary goods

Where price and demand move in the same direction

Equilibrium point

price + quantity

Changes in supply and demand ______ guarantee price or quantity changes

don’t always

How does one find the exchange price?

It’s the range between two country’s opportunity costs

Nominal GDP (formula)

real GDP x (deflator/100)

Is GDP a measure of the standard of living?

No,

What has a government done if it moves from a deficit to a surplus?

Increaed taxes or decreased government spending

What graph do you need to examine if you’re dealing with the budget balance?

market for loanable funds

is the quantity demanded/quantity supplied is a shift or a point

point

Money multiplier (formula)

1/reserve ratio

When is the actual unemployment rate below the natural unemployment rate?

When a country produces more than its potential GDP

Price Index

(current market basket/base year market basket) x 100