What is monetary policy used for?

It is used to stabilize prices and output

What exactly is expansionary fiscal policy?

Increasing gov. spending and/or tax reductions

When is expansionary fiscal policy used?

It is used when recession occurs

What are the determinants of aggregate demand?

Consumption, Investment, Government spending, Net exports

When is contractionary fiscal policy used?

It is used when demand-pull inflation occurs

What effect does an expansionary fiscal policy have on a AD and SRAS?

An increase in agg. demand and real GDP

Which one of the following scenarios would cause the demand for $ to increase?

United States becomes a popular tourist attraction

What effect does contractionary fiscal policy have on a graph?

A decrease in agg. demand, therefore it eliminates inflation

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AP Macroeconomics Review

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AP Macroeconomics Review Game created by Celeste Sandoval, Saul Reyes, and Andrew Sanchez

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Questions 20

Answers

1
What is monetary policy used for?
It is used to stabilize prices and output
It is used to increase prices and output
It is used to stabilize output only
It is used to stabilize prices only
2
What would be the label for the x-axis of the foreign exchange market for Canadian Dollars?
Currency in question / Canadian Dollars
Canadian Dollars / Currency in question
Quantity of Canadian Dollars
Demand for Canadian Dollars
3
China makes 3 cars/50 toys, US makes 4 cars/65 toys. __has abs. advantage for toys, __for cars.
United States, China
United States, United States
China, United States
China, China
4
What exactly is expansionary fiscal policy?
Increasing gov. spending and/or no tax reduction
Increasing gov. spending and/or tax reductions
Decreasing gov. spending and/or tax reduction
Decreasing gov. spending and/or tax increase
5
If one currency appreciates, another country's currency ________.
Depreciates
Becomes Inflated
Becomes Deflated
Appreciates
6
When is expansionary fiscal policy used?
It is used when recession occurs
It used when agg. supply increases
It is used when inflation occurs
It is used when agg. demand decreases
7
What are the determinants of aggregate demand?
Consumption
Investment
Government spending
Net exports
8
Which is not a shifter of the demand and supply of currency in the foreign market?
Price Level
Interest Rates
Tastes and Preferences
Net Exports
9
What does this graph show?
Recessionary
Full employment
Inflationary Gap
10
What does this graph show?
Full Employment
Inflationary Gap
Recessionary Gap
11
What happens to the price level (PL) and output(O) when aggregate demand increases?
PL and O both decrease
PL and O both stay the same
PL increases and O decreases
PL and O both increases
12
When is contractionary fiscal policy used?
It is used when demand-push inflation occurs
It is used when supply and demand increases
It is used when demand-pull inflation occurs
It is used when supply and demand decrease
13
The three types of unemployment are cyclical, frictional and structural
False
True
14
What makes up the natural rate of unemployment ?
Cyclical + Frictional
Frictional + Structural
Only Structural
Cyclical + Structural
15
What effect does an expansionary fiscal policy have on a AD and SRAS?
An increase in agg. demand and real GDP decreases
An increase in agg. supply and real GDP
A decrease in agg. demand and real GDP decreases
An increase in agg. demand and real GDP
16
Which one of the following scenarios would cause the demand for $ to increase?
United States exports decrease
China offers deals to Americans
United States has lower interest rates than China
United States becomes a popular tourist attraction
17
What effect does contractionary fiscal policy have on a graph?
A decrease in agg. demand, therefore inflation occurs
A decrease in agg. demand, therefore it eliminates inflation
An increase in agg. demand, therefore eliminates inflation
An increase in agg. demand, therefore inflation occurs
18
What happens to the price level (PL), and output (O), when aggregate supply decreases?
PL and O both stay the same
PL increases and O decreases
PL and O both increases
PL and O both decrease
19
What happens to the value of the dollar internationally, if Demand for the dollar increases?
It will appreciate
It will deflate
It will depreciate
It will inflate
20
Net exports ________ when a country's money ________.
Increase, Appreciate
Decrease, Depreciate
Do not change, Appreciate
Decrease, Appreciate

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