AP Macroeconomics Unit 2 Review

Question 1

What is the primary cause of hyperinflation?

Accepted Answer

rapid growth of the money supply

Question 2

What is the major difference between GDP and Real GDP?

Accepted Answer

Real GDP is adjusted to account for inflation

Question 3

A market basket of goods is $300 in 2014 (base year) & $450 in 2015. What is the CPI in 2015?

Accepted Answer

150

Question 4

The MPC is .80. How much will GDP increase by if the government increases spending by $100?

Accepted Answer

$500

Question 5

Which of the following would be included when calculating GDP?

Accepted Answer

buying new brakes for your car

Question 6

In 2014, Nominal GDP was 50 billion and the GDP deflator was 200. What was Real GDP?

Accepted Answer

$25 Billion

Question 7

The CPI in 2009 is 220 and the CPI in 2008 is 215. What is the inflation rate?

Accepted Answer

2.3%

Question 8

Which of the following would cause the aggregate demand curve to shift to the right?

Accepted Answer

A decrease in real interest rates

Question 9

If nominal wages increase with the economy @ full employment, which of the following happens?

Accepted Answer

Aggregate supply decreases and there is a recessionary gap

Question 10

Which of the following is true if the economy is at full employment?

Accepted Answer

there is only cyclical unemployment

Question 11

Which of the following supplies the factors of production in the circular flow diagram?

Accepted Answer

households

Question 12

If Nominal GDP increases by 8% while the GDP deflator increases by 10%. Real GDP.......

Accepted Answer

has decreases by 2%

Question 13

Nominal interest rate =10%; Expected inflation = 5%. What is the real interest rate?

Accepted Answer

5%

Question 14

Which of the following would be classified as investment when calculating GDP?

Accepted Answer

a new home

Question 15

The government deregulates the steel & automobile industries. Which of the following occurs?

Accepted Answer

Aggregate Supply increases and the Price level decreases

Question 16

The CPI in 2000 is 190 & it's 225 in 2015. A gallon of gas that cost $1.50 in 190 = X in 2015

Accepted Answer

x = $1.78

Question 17

FE GPP = $400 Billion. Current GDP=$450 Billion & the MPS=.5. What should the Government do?

Accepted Answer

decrease spending by $25 Billion

Question 18

FE GDP = $200 Billion. Current real GDP is $160 Billion & the MPS = .25. What should Gov. do?

Accepted Answer

increase spending by $10 billion

Question 19

Which of the following is true if the housing market crashes?

Accepted Answer

Aggregate Demand decreases and Real GDP decreases

Question 20

If the MPC=.75, what is the spending multiplier?

Accepted Answer

4

Question 21

What is the approximate unemployment rate when the U.S. is at full employment?

Accepted Answer

5%

Question 22

Linda hates her boss, so she quits her accounting job. What type of unemployment is she facing?

Accepted Answer

frictional

Question 23

Population=180; Employed=94; Unemployed=6; NLF=80. What is the Unemployment rate?

Accepted Answer

6%

Question 24

Which of the following understates the official unemployment rate?

Accepted Answer

discouraged workers

Question 25

Which of the following will lead to an increase in aggregate supply?

Accepted Answer

The government increases business subsidies

AP Macroeconomics Unit 2 Review

Questions 25

AP Macroeconomics Unit 2 Review

Questions 25