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AP Econ FINAL REVIEW Fall 2024 Part 2 Flashcards | StudBud
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AP Econ FINAL REVIEW Fall 2024 Part 2
AP Econ FINAL REVIEW Fall 2024 Part 2
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An #economics #review over the entire course of a #high #school #AP #Economics class.
Flashcards
36 cards
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Practice quiz
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Questions
36
Answers
1
What is opportunity cost?
What you pay for with a credit card.
The cost of a good or service.
What you give up when you make a choice.
The opportunity to go shopping.
2
The money multiplier formula shows the effects of
low interest rates on creditors over a long period.
Federal Reserve discount rate reductions on the bond markets.
a cash deposit into the banking system on the money supply.
a required reserve ratio on excess reserves.
3
Long run aggregate supply reflects when...
When all factors of production are variable
When Labour is variable
When all factors of production are fixed
When one of more factors of production are fixed
4
Supply of money saved
Aggregate Supply (SRAS)
The Money Supply
Bonds
Loanable Funds
5
If the nominal interest rate is 8% and the inflation rate is 5%, the real interest rate is
3%
13%
8%
-5%
6
Aggregate demand increases: What happens in the long run?
Prices constant, GDP up
Prices up, GDP down
Prices up, GDP constant
Prices up, GDP up
7
What is the goal of contractionary fiscal policy?
Slow down inflationary economy.
Get out of a recession
Speed up inflation.
Raise taxes.
8
What should the Gov't do if the economy experiencing high Inflation.
Decrease Gov't Spending and Decrease Taxes
Sell Bonds
Increase Gov't Spending and Decrease Taxes
Decrease Spending and Increase Taxes
9
The Phillips curve shows the relationship between unemployment and inflation.
True
False
10
Which of the following is not a factor affecting exchange rates?
Country's population
Interest rates
Government/National Debt
Inflation rate
11
When the supply of a good is low, and the demand is high, what usually happens to the price of the good?
It goes up.
It depends on the item.
It doesn't change.
It goes down.
12
The natural rate of unemployment is :
The sum of structural and frictional unemployment
the sum of seasonal and frictional unemployment
The sum of frictional and cyclical unemployment
The sum of cyclical, seasonal and underemployment
13
Interest rates reflect the cost of:
inflation
unemployment
lending
borrowing
14
What can shift the short-run aggregate supply curve?
Changes in commodity prices
All of the above
Changes in productivity
Changes in nominal wages
15
During a period of recession, which fiscal policy tool would be prescribed?
lower interest rates
raise interest rates
raise income taxes
increase government spending
16
Inflation is a prolonged rise in the price of goods and services
False
True
17
Which of the following would best portray long-term economic growth?
a leftward shift of the short run aggregate supply curve
a leftward shift of the production possibilities curve
a rightward shift of the aggregate demand curve
a rightward shift of the long run aggregate supply curve
18
How can exchange rates positively affect exporters?
Their product costs less for overseas customers
Exporters can buy at inflated exchange rates to earn more
Importers are more willing to buy the product b/c it's better quality
May earn money from national debt of country receiving goods
19
Capital Goods
The capital of Georgia.
None of the above.
Things that are useless.
Things that that are used to make other things.
20
Market Equilibrium is when...
quantity producers demand is lower than consumers supply
consumer demand does not meet producer supply
producer supply does not meet consumer demand
quantity consumers demands equals quantity producers supply
21
When a country can produce a product with a lower opportunity cost, it's called...
Comparative Advantage
Absolute Advantage
Money Supply
GDP
22
What is the business cycle???
The way businesses trade their goods for services.
The cycle of how corprate businesses collab.
The cycle that is created for bussiness to enhance spending.
Intervals of expansion followed by recession in economic activity.
23
The denominator of the money multiplier equation is:
discount rate
federal funds rate
required reserve ratio
required reserves
24
A side effect of contractionary fiscal policy is
rising inflation
rising unemployment
growing money supply
rising GDP
25
What kind of monetary policy should The Fed use during a recession?
Contractionary Monetary Policy
Long term self-adjustment
Expansionary Monetary Policy
26
The short run aggregate supply curve (sras) moving to the left will do what to the Philips curve?
shifts to the right
cause the point to move on the curve
shifts to the left
remain the same
27
Recession is caused by
decreasing AS
Deflation
Unemployment
decreasing AD
28
If an individual moves money from a savings deposit account to a certificate of deposit:
M1 increases and M2 decreases
M1 decreases and M2 increases.
M1 stays the same and M2 increases
M1 stays the same and M2 stays the same.
29
What shifts aggregate demand to the right?
Rise in consumption
decrease in government spending
fall in prices
Fall in net trade
30
Long-term economic growth can occur with all of the below except?
increase in the quality of resources
increase in technological advancements
increase in the quantity of resources
increase in consumer spending
31
Calculate the money multiplier when the reserve requirement is 10%...
10
5
2
1
32
What are the components of aggregate demand?
Consumption and Investments
Consumption and Net Exports
Government Spending and Consumption
Consumption, Investments, Government Spending, and Net Exports
33
Describe the AS curve in the Long Run
Always downward sloping
Always horizontal
Always vertical
Always upward sloping
34
Exchange rates are used to determine the price of a currency in terms of another currency.
False
True
35
When aggregate demand grows briskly, the economy contracts.
False
True
36
To reduce inflation, the Federal Reserve could....
buy bonds
expand the money supply
contract the money supply
reduce the discount rate
