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AP Macroeconomics: 21-40 Flashcards | StudBud
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AP Macroeconomics: 21-40
AP Macroeconomics: 21-40
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AP Macroeconomics practice test.
Flashcards
20 cards
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Practice quiz
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Questions
20
Answers
1
Technological progress promotes long-run economic growth primarily by
increasing labor productivity
decreasing national savings
decreasing budget deficit
decreasing nominal wages
2
An increase in money demanded will cause which of the following?
A decrease in the nominal interest rate
A decrease in the money supply
An increase in the price level
A decrease in bond prices
3
Which of the following would most likely cause an increase in interest rates in the short run?
A decrease in the reserve requirements
An increase in the price of bonds
An increase in government spending financed by borrowing
An open market purchase of government bonds by the FED
4
If FED buys bonds from individuals and banks don't loan excess reserves from open market, _____
the level of actual reserves will decrease
the money supply will increase
the money supply will remain unchanged
demand deposits will increase
5
Gross private domestic investment includes which of the following?
New durable goods purchased by households
National defense spending
Changes in business inventories
Transfer payments
6
If economy goes into recession what will happen to the government's budget in the short run?
be in a deficit, because automatic decrease in tax reciepts
be in a surplus because the gov. will increase its spendings
be in a deficit, because the price level will decrease
be in a deficit, because the gov. will raise the tax rates
7
RR=10%. Jim deposits $1 million in cash into his checking account. Increase excess reserves by
$100,000
$900,000
$10 million
$9 million
8
An increase in ____ is most likely to increase employment and promote long-run economic growth?
Transfer payments
Government spending on education
Reserve requirements
Income tax rates
9
In the long run, a fully anticipated increase in the inflation rate will
decrease real national output
decrease the real interest rate
increase the nominal interest rate
increase real national output
10
Based on the graph, cost push inflation is caused by a movement from
AD1 to AD2
AD2 to AD1
SRAS2 to SRAS1
SRAS1 to SRAS2
11
MPC=0.9 GDP=$100 billion. If gross private domestic investment declines by $2 billion, GDP will
increase by a maximum of $20 billion
decrease by a maximum of $2 billion
decrease by a maximum of $1.8 billion
decrease by a maximum of $20 billion
12
If gov. increases deficit spending, the price of bonds _____ and the real interest rate _____.
increase; decrease
increase; no change
decrease; decrease
decrease; increase
13
Which of the following is the best example of an investment in human capital?
Training workers
Updating technology
Buying new equipment
Hiring new workers
14
The graph shows the demand for and supply of a good. If the market price is P
1
, then
there is a surplus, and the price will rise
there is a shortage, and the price will rise
there is a shortage, and the price will fall
there is surplus, and the price will fall
15
Following a decrease in aggregate demand, an increase in unemployment will result if
prices and wages quickly adjust to equilibrium levels
prices and nominal wages are slow to adjust in the short run
short-run aggregate supply also increase
prices increase and real wages decrease
16
Bob quits his job to look for one that has opportunity for advancement. Bob is ___ unemployed
Seasonaly
Cyclicaly
Structuraly
Frictionaly
17
Which of the following is implied by a long-run Phillips curve?
Wages are sticky
Expected inflation exceeds actual inflation
There is no trade-off between unemployment and inflation
The unemployment rate falls with higher inflation
18
The short-run Phillips curve shows
expectations change as inflation ↑ and unemployment ↓
a trade-off between unemployment rate and rate of inflation
trade-off between natural rate of unemployment and inflation
relationship between increases in money supply and inflation
19
The exchange rate is 1.2€ per $. If a meal cost 30€ in Paris, what is $ cost to US tourist?
$30
$25
$3.60
$36
20
Which of the following will lead to an increase in United States net exports?
An increase in government expenditures in the United States
An increase in United States real gross domestic product
Appreciation of the US dollar on the foreign exchange market
Depreciation of the US dollar on the foreign exchange market
