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