Exam (elaborations)
AP Macroeconomics Final Exam Questions and Answers (Graded A)
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AP Macroeconomics Final Exam Questions and Answers
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AP Macroeconomics: Final ExamQuestions and Answers
What iiis iithe iimost iifundamental iiissue iithat iieconomics iiaddresses? ii- iiAnswers ii-Use iiof
iiscarce iiresources
Inflation iioccurs iiwhen iithere iiis iia iisustained iiincrease iiin ii- iiAnswers ii-average iiprice
iilevel
An iiincrease iiin iispending iiin iian iieconomy iiwill iicause iia iimultiplied iiincrease iiin iiGDP
iibecause ii- iiAnswers ii-consumption iiincreases iias iiincome iiincreases
A iicontraction iiin iithe iimoney iisupply iiwill iimost iilikely iichange iithe iinominal iiinterest iirate
iiand iiaggregate iidemand iiin iiwhat iiway iiin iithe iishort iirun? ii- iiAnswers ii-Nominal iiInterest
iiRate- iiIncrease, iiAggregate iiDemand- iiDecrease
If iithe iieconomy iiis iiin iia iisevere iirecession, iiwhat iipolicy iiaction iiis iimost iiappropriate? ii-
iiAnswers ii-Increasing iiboth iithe iimoney iisupply iiand iigovernment iispending
The iimost iiliquid iiasset iiis ii- iiAnswers ii-currency
If iinominal iiinterest iirate iiis ii8% iiand iithe iiexpected iiinflation iiis ii3%, iithe iireal iiinterest
iirate iiis ii- iiAnswers ii-5%
An iiincrease iiin iithe iiinternational iivalue iiof iithe iiUS iidollar iiwill iimost iilikely iibenefit ii-
iiAnswers ii-retired iiUS iicitizens iiliving iioverseas iion iitheir iisocial iisecurity iichecks
What iigroup iiwould iimost iilikely iigain iifrom iiunanticipated iiinflation? ii- iiAnswers ii-
Individuals iiwho iihave iiborrowed iimoney iiat iifixed iiinterest iirates
The iipurchase iiof iisecurities iion iithe iiopen iimarket iiby iithe iiFederal iiReserve iiwill ii-
iiAnswers ii-Increase iithe iisupply iiof iimoney
Total iispending iiin iithe iieconomy iiis iimost iilikely iito iiincrease iiby iithe iilargest iiamount iiif
iiwhat iioccurs iito iigovernment iispending iiand iitaxes? ii- iiAnswers ii-Government
iiSpending- iiIncrease, iiTaxes- iiDecrease
, For iian iieconomy iiconsisting iiof iihouseholds iiand iibusinesses iionly, iiwhat iiis iiconsistent
iiwith iithe iicircular iiflow iiof iiincome iiand iiproduction? ii- iiAnswers ii-Households iiare
iisuppliers iiof iiresources iiand iiconsumers iiof iigoods iiand iiservices
If iia iibanking iisystem's iireserves iiare ii$100 iibillion, iidemand iideposits iiare ii$500 iibillion,
iiand iithe iisystem iiis iifully iiloaned-up, iithe iithe iireserve iiratio iimust iibe ii- iiAnswers ii-20%
ii(100/500=0.2)
An iiincrease iiin iiwhat iiwould iicause iithe iilong-run iiaggregate iisupply iicurve iito iishift iito
iithe iiright? ii- iiAnswers ii-Potential iiOutput
If iian iieconomy iiis iioperating iiwith iisignificant iiunemployment, iian iiincrease iiin iiwhat iiwill
iimost iilikely iicause iiemployment iito iiincrease iiand iithe iiinterest iirate iito iidecrease? ii-
iiAnswers ii-Purchases iiof iigovernment iibonds iiby iithe iicentral iibank
To iicounteract iia iirecession, iithe iiFederal iiReserve iishould ii- iiAnswers ii-Buy iisecurities
iion iithe iiopen iimarket iiand iilower iithe iireserve iirequirement
An iiappreciation iiof iithe iiUS iidollar iion iithe iiforeign iiexchange iimarket iicould iibe iicaused
iiby iia iidecrease iiin iiwhat? ii- iiAnswers ii-US iiconsumer iiprice iiindex
If iithe iimarginal iipropensity iito iiconsume ii(MPC) iiis ii0.75, iithen iia ii$100 iiincrease iiin
iiinvestment iiwill iiresult iiin iia iimaximum iiincrease iiin iiequilibrium iireal iiGDP iiof ii-
iiAnswers ii-$400 ii(Multiplier=4→4x100)
What iiwould iiindicate iithat iieconomic iigrowth iihas iioccurred? ii- iiAnswers ii-LRAS iicurve
iishifts iito iithe iiright
Crowding iiout iirefers iito iithe iidecrease iiin ii- iiAnswers ii-private iiinvestment iidue iito
iiincreased iiborrowing iiby iithe iigovernment
Suppose iithat iiCountry iiA iiis iiexperiencing iihigh iiinflation iirelative iito iiCountry iiB, iiwhich
iiis iienjoying iisteady iigrowth iiwith iia iistable iiprice iilevel. iiWhat iiwould iioccur iiin iithe
iiforeign iiexchange iimarket? ii- iiAnswers ii-Depreciation iiof iiCountry iiA's iicurrency
The iidemand iifor iimoney iiincrease iiwhen iinational iiincome iiincreases iibecause ii-
iiAnswers ii-Spending iion iigoods iiand iiservices iiincreases
What iirelationship iiis iiillustrated iiby iia iishort-run iiPhillips iicurve ii(SRPC)? ii- iiAnswers ii-
Decrease iiin iiinflation iirate iiand iiIncrease iiin iiunemployment iirate
What iiwill iibe iicounted iias iiunemployed iiby iithe iiUS iiBureau iiof iiLabor iiStatistics? ii-
iiAnswers ii-Persons iiwho iiwere iifired iifrom iitheir iiprevious iijobs iiand iiare iiactively
iiapplying iifor iiwork
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