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AP Macroeconomics Exam Questions and Answers (Latest Update 2024)
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AP Macroeconomics Exam Questions and Answers (Latest Update 2024)
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AP Macroeconomics Exam Questions andAnswers (Latest Update 2024)
aggregate demand curve - Correct Answer ✅ a curve
depicting the relationship between real GDP demanded (i.e.,
expenditures) and the price level in the economy; the
aggregate demand curve slopes downward from left to right.
aggregate supply curve - Correct Answer ✅ a curve
defining the relationship between real production and price
level.
business cycles - Correct Answer ✅ fluctuations in real GDP
around the trend value; also called economic fluctuations.
consumer surplus - Correct Answer ✅ the difference
between the maximum price a consume is (or would be)
willing to pay and the price he or she actually pays.
cost-push inflation - Correct Answer ✅ inflation created
when an increase in the costs of production (wages or raw
materials) shifts the short-run aggregate supply (AS) curve to
the left; tends to push prices up while reducing the level of
real GDP at the same time (stagflation).
,AP Macroeconomics Exam Questions and
Answers (Latest Update 2024)
cyclical unemployment - Correct Answer ✅ unemployment
that reflects changes in the business cycle; the difference
between the official unemployment rate & the natural rate of
unemployment.
demand-pull inflation - Correct Answer ✅ inflation that
follows from an increase in aggregate demand, which will
cause equilibrium real GDP (Y) to increase and the
equilibrium price level (P) to increase.
depreciation - Correct Answer ✅ when the price of one
currency falls relative to another currency, the first currency
has depreciated relative to the other one.
depression - Correct Answer ✅ period in which a recession
becomes prolonged and deep, involving high unemployment.
elastic - Correct Answer ✅ significantly responsive to a
change in price.
, AP Macroeconomics Exam Questions and
Answers (Latest Update 2024)
exchange rate - Correct Answer ✅ the price of a domestic
currency in terms of a foreign currency.
expansion - Correct Answer ✅ period in which the
economy moves from a trough to a peak and a real GDP is
increasing; also called a boom.
expansionary fiscal policy - Correct Answer ✅ enacted
when the government deliberately increases its deficit to
stimulate the economy; the government increases its
spending (increases G), cuts taxes (decreases T), or both, and
stimulates the economy by expanding aggregate demand
(AD).
expansionary monetary policy - Correct Answer ✅
monetary policy methods by which the Fed aims to increase
the money supply and lower interest rates, thereby creating
an increase in output; in pursuit of expansionary policy goals,
the Fed can lower the required reserve ratio, lower the
discount rate, or purchase government securities on the open
market.
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