AP Macro Graphing Review

Question 1

If the PPC Curve shifts right (outward), that would represent...

Accepted Answer

economic growth

Question 2

A decrease in government spending would have the following effect on this SRAS/AD model

Accepted Answer

decrease AD

Question 3

A monetary policy which could return this economy to long run equilibrium would be ...

Accepted Answer

raise the administered rates

Question 4

What is measured on the vertical axis of the Phillips Curve?

Accepted Answer

Inflation rate

Question 5

A fiscal policy which could return this economy to long run equilibrium would be ...

Accepted Answer

increase taxes

Question 6

This model shows an economy ...

Accepted Answer

with an inflationary gap

Question 7

What is measured on the horizontal axis of the Phillips curve?

Accepted Answer

Unemployment rate

Question 8

Why would a central bank want to increase the money supply?

Accepted Answer

to steer the economy out of a recession

Question 9

If the current production point lies inside the PPC curve, then that economy is currently...

Accepted Answer

in a recession

Question 10

If the current point of production in ON the PPC curve, that represents...

Accepted Answer

an economy operating at full employment

Question 11

Why would the FED take the action shown in the graph?

Accepted Answer

Fight Unemployment

Question 12

Which of the following would most likely lead to economic growth (LRAS to shift right)?

Accepted Answer

investment in capital

Question 13

A fiscal policy which could return this economy to long run equilibrium would be ...

Accepted Answer

decrease government spending

Question 14

If real interest rates in the United States increased relative to those in Europe ...

Accepted Answer

the demand for USD would increase, appreciating the dollar

Question 15

In this model of the FOREX market, who would demand the U.S. dollars?

Accepted Answer

Europeans

Question 16

This economy could best be described as ...

Accepted Answer

being in recession

Question 17

A fiscal policy which could return this economy to long run equilibrium would be ...

Accepted Answer

increase government spending

Question 18

This model represents a...

Accepted Answer

Production Possibilities Curve

Question 19

The supply of loanable funds represents the amount of ...

Accepted Answer

excess reserves in the banking system

Question 20

This model represents the ...

Accepted Answer

Money Market

Question 21

What is measured on the vertical axis of the Foreign Exchange model?

Accepted Answer

exchange rate

Question 22

What is measured on the vertical axis of the Loanable Funds market?

Accepted Answer

real interest rate

Question 23

What open market operation (Limited Reserves system) could return this economy to long run equilibrium?

Accepted Answer

sell bonds

Question 24

This model represents the ...

Accepted Answer

Market for Loanable Funds

Question 25

An increase in consumer spending would have the following effect on this SRAS/AD model

Accepted Answer

increase AD

Question 26

Who controls and has the ability to shift the money supply?

Accepted Answer

the FED or other central bank

Question 27

When the central bank increases the money supply, it has the following effect on the federal funds rate.

Accepted Answer

decreases the federal funds rate, increasing real GDP

Question 28

The point on this SRPC illustrates that this economy is probably in

Accepted Answer

a recession

Question 29

An increase in regulation or per unit production tax would have what effect on this model

Accepted Answer

decrease in SRAS

Question 30

Why would the FED take the action illustrated in the graph?

Accepted Answer

To fight Inflation

Question 31

An increase in U.S. imports will result in which of the following in foreign exchange markets?

Accepted Answer

Increased United States demand for foreign currencies

Question 32

The model represents the ...

Accepted Answer

Foreign Exchange market

Question 33

An increase in nominal wages would have the following effect on this SRAS/AD model

Accepted Answer

decrease SRAS

Question 34

In this model of the FOREX market, who would supply the U.S. dollars?

Accepted Answer

Americans

Question 35

This model represents the ...

Accepted Answer

The Phillips Curve

Question 36

What would be the FED action (ample reserves) to fight inflation?

Accepted Answer

Increase the Administered Rates

Question 37

What action has the FED taken in this graph?

Accepted Answer

Decreased the Adminitered Rates

Question 38

An open market operation (Limited Reserves system) which could return this economy to long run equilibrium would be ...

Accepted Answer

buy bonds

Question 39

When government engages in deficit spending, driving up the real interest rate, it leads to

Accepted Answer

crowding out of private investment

Question 40

Providing businesses with investment tax credits would have the following effect on this model

Accepted Answer

increase SRAS

Question 41

A decrease in income taxes would have the following effect on this SRAS/AD model

Accepted Answer

increase AD

Question 42

This model represents ...

Accepted Answer

the macroeconomy

Question 43

A monetary policy which could return this economy to long run equilibrium would be ...

Accepted Answer

lower the administered rates

Question 44

This economy can be described as being in ...

Accepted Answer

long-run equilibrium

Question 45

The vertical Long Run Phillips Curve (LRPC) represents

Accepted Answer

full employment

Question 46

What action has the FED taken according to the graph?

Accepted Answer

Raised the Interest on Reserves

Question 47

If Europe enters a recession, what would happen in this FOREX market?

Accepted Answer

Decrease demand in USD, causing dollar to depreciate

Question 48

A decrease in exports would have the following effect on this SRAS/AD model

Accepted Answer

decrease in AD

Question 49

A PPC Curve illustrates...

Accepted Answer

How much an economy is capable of producing

Question 50

A fiscal policy which could return this economy to long run equilibrium would be ...

Accepted Answer

decrease taxes

AP Macro Graphing Review

Questions 50

AP Macro Graphing Review

Questions 50