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AP Macro Review Flashcards | StudBud
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AP Macro Review
AP Macro Review
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1
If $25 of a person's $75 pay raise is put into a savings account, what is the person's MPS?
.33
.25
1.00
.67
2
What unemployment results when people transition from school to work, or move away from home?
Frictional
Seasonal
Cyclical
Structural
3
If the RR is 20%, what is the total possible increase in the MS if the Fed injects $100b?
$500b
$80b
$100b
$20b
4
What type of unemployment results from downturns in economic growth (recessions)?
Cyclical
Structural
Frictional
Seasonal
5
If the demand for stuffed animals increases, what will happen to equilibrium P and Q?
P decreases, Q increases
P increases, Q increases
P increases, Q decreases
P decreases, Q decreases
6
What could shift aggregate supply from SRAS2 to SRAS1?
A reduction in the price of resources.
An increase in demand for firms' products.
The imposition of new taxes on businesses.
An increase in worker productivity.
7
What kind of opportunity cost is illustrated in the production possibilities curve below?
Constant
Increasing
Zero
Decreasing
8
What would cause the short run Phillips Curve to shift outward/upward?
Expectations of a recession
Expectations of increased inflation
Increased unemployment
A recession
9
If a country's CPI increases from 120 to 130 over the course of a year, it indicates...
The country's real GDP increased
The price of goods and services has roughly doubled
Deflation has occurred
Some inflation took place
10
If an economy makes 20 units of a good which sells for $20/ea, and the money supply is $100...
The velocity of money must be 3
The velocity of money must be 5
The velocity of money must be 2
The velocity of money must be 4
11
A country's Per Capita GDP would increase if (all other factors equal)....
The country's inflation rate increases
The country's imports increase
The country's government spending increases
The country's population increases
12
If a person saves $10,000 of her annual $50,000 salary, what is the person's APC?
1.00
.25
.80
.20
13
Who benefits from unexpected inflation?
Individuals with significant money savings
People on fixed incomes
Creditors (lenders)
Debtors (borrowers)
14
If the supply of stuffed animals increases, what will happen to equilibrium price and quantity?
P increase, Q increases
P increases, Q decreases
P decreases, Q increases
P decreases, Q decreases
15
What is one way a central bank (the Fed) could increase interest rates?
Cut Taxes
Buy Bonds from Commercial Banks
Decrease the Federal Funds Rate
Increase the Discount Rate
16
What type of inflation results when a rapid expansion in the money supply occurs?
Deflation
Cost-Push
Supply-Side
Demand-Pull
17
If the economy is in a severe recession, what corrective fiscal action could be undertaken?
New Government Spending on Infrastructure
Government Spending Cuts
Contractionary Monetary Policy
Tax Increases
18
What is one way a central bank (the Fed) could reduce interest rates?
Buy Bonds from Commercial Banks
Increase the Reserve Requirement
Increase the Discount Rate
Increase the Federal Funds Rate
19
If the economy is experiencing hyperinflation, what monetary policy should be enacted?
Tax Cuts
Expansionary Monetary Policy
Government Spending Increases
Contractionary Monetary Policy
20
If the U.S. Dollar depreciates...
U.S. products become relatively cheaper for foreign buyers
U.S. exports will be more expensive for foreign buyers
U.S. consumers and businesses will buy more imported goods
The U.S. current account balance will show a greater deficit
21
Crowding out occurs when...
When the Fed expands the money supply
The government gives tax break
When domestic investment demand is high
When the government engages in deficits and must borrow
22
Which of the following is counted towards Ireland's GDP?
Motorcycles produced in Limerick
A surgery performed in London
Pumpkins grown for home consumption in Galway
Crystal Meth made in Dublin
23
If the government wants to slow the rate of inflation, it may...
Increase government spending
Reduce taxes
Contract the money supply
Expand the money supply
24
If interest rates (offered by banks) increase in the United States...
Demand for the U.S.$ will increase, causing it to appreciate
The supply of U.S.$ to FOREX markets will increase
The supply of foreign currencies on FOREX markets will decrease
Demand for the U.S.$ will decrease, causing it to depreciate
25
If the U.S. levies higher tariffs on foreign furniture...
Imports of foreign furniture into the U.S. will increase
Domestic furniture producers will realize higher profits
Exports of domestic-made furniture will immediately increase
U.S. consumers will pay less for the furniture they buy
26
If the Marginal Propensity to Save is .4, what is the simple (GDP) multiplier?
2.5
.4
4
10
27
If the U.S. is running a financial (capital) account surplus of $500 billion...
U.S. net export of goods and services must be positive
U.S. currency is flowing out to buy stocks, bonds, etc.
The U.S. is buying more foreign assets than they buy of ours
It must be running a current account deficit of $500b
28
If the MPC is .9, how much will $80b in new government spending increase GDP by?
$72b
$8b
$800b
$720b
29
If there are 30 active workers, 10 people looking for work, and 10 NILF's, what's the U rate?
20%
10%
25%
33%
30
The difference between Real GDP and Nominal GDP can be attributed to...
Taxes
Net Exports
Inflation
Unemployment
31
Which of the following's value would be counted in New Zealand's GDP?
Tickets to a rugby match in Wellington
A jog taken by a woman in Christchurch
A prostitute's services in Auckland
A sheep's wool, later to be sewn into a sweater, in Nelson
32
What does point E represent in the production possibilities curve graph below?
Impossible Production with current tech, resources
Inefficient Production
Production that favors Boats over Trucks
Production that favors Trucks over Boats
33
An increase in which of the following will
not
cause an increase in a country's GDP?
Investment
Exports
Government Spending
Imports
34
What could shift aggregate demand from AD1 to AD2?
An increase in exports to other countries
An increase in Government Spending
Tax increases upon households and businesses
A reduction in the price level
35
What type of inflation occurs when factors of production increase in price?
Deflation
Cost-Push
Aggregade Demand-Side
Demand-Pull
