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AP Macroeconomics Practice Test Questions with correct Answers
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AP Macroeconomics Practice Test Questions with correct Answers
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AP Macroeconomics Practice TestQuestions with correct Answers
According iito iithe iishort-run iiPhillips iicurve, iilower iiinflation iirates iiare iiassociated iiwith ii
A) iiHigher iiunemployment iirates
B) iiHigher iigovernment iispending
C) iiLarger iibudget iideficits ii
D) iiGreater iilabor-force iiparticipation iirates
E) iiSmaller iilabor-force iiparticipation iirates ii- iiAnswers ii-A) iiHigher iiunemployment iirates
The iiPhillips iicurve iidemonstrates iithe iiinversely iiproportional iirelationship iibetween
iiinflation iiand iiunemployment ii(more iiunemployment ii= iilower iiinflation iiand iivice iiversa)
Which iiof iithe iifollowing iiwill iilead iito iia iidecrease iiin iia iination's iimoney iisupply. ii
A) iiA iidecrease iiin iiincome iitax iirates
B) iiA iidecrease iiin iithe iidiscount iirate
C) iiAn iiopen iimarket iipurchase iiof iigovernment iisecurities iiby iithe iicentral iibank
D) iiAn iiincrease iiin iireserve iirequirements
E) iiAn iiincrease iiin iigovernment iiexpenditures iion iigoods iiand iiservices ii- iiAnswers ii-D)
iiAn iiincrease iiin iireserve iirequirements
An iiincrease iiin iireserve iirequirements iicauses iithe iimoney iimultiplier iito iidecrease.
iiAlso, iibanks iiare iinot iiable iito iilend iiout iias iimuch iimoney iisince iithey iiare iirequired iito
iisave iimore.
An iiincrease iiin iiwhich iiof iithe iifollowing iiwould iicause iithe iiaggregate iidemand iicurve iito
iishift iito iithe iileft?
A) iiConsumer iioptimism ii
B) iiPopulation ii
C) iiCost iiof iiresources
D) iiIncome iitaxes
E) iiNet iiexports ii- iiAnswers ii-D) iiIncome iitaxes
, Income iitaxes iibeing iiincreased iiwould iiallow iiconsumers iito iispend iiless, iiwhich iiwould
iicause iiconsumers iito iidemand iiproducts iiat iia iilower iiprice. iiA iileftwards iishift iiindicates
iimore iidemand iifor iicheaper iiproducts, iiso iiincome iitaxes iiwould iicause iithe iiaggregate
iidemand iicurve iito iishift iileft.
Which iiof iithe iifollowing iichanges iiin iithe iisupply iiof iiand iiand iithe iidemand iifor iia iigood
iiwill iidefinitely iiresult iiin iia iidecrease iiin iiboth iithe iiequilibrium iiprice iiand iiquantity iiof iithe
iigood?
A) iiSupply: iiIncrease ii; iiDemand: iiIncrease
B) iiSupply: iiIncrease ii; iiDemand: iiNo iichange
C) iiSupply: iiNo iichange ii; iiDemand: iiDecrease
D) iiSupply: iiDecrease ii; iiDemand: iiIncrease
E) iiSupply ii: iiDecrease ii; iiDemand ii: iiDecrease ii- iiAnswers ii-C) iiSupply: iiNo iichange ii;
iiDemand: iidecrease
Liabilities: iiDemand iiDeposits ii; iiAssets: iiActual iireserves, iiloans
Bank iiA: ii
iiActual iiReserves: ii$1,000 ii; iiLoans: ii$4,000 ii; iiDemand iideposits: ii$5,000
Bank iiB:
iiActual iireserves: ii$100 ii; iiLoans: ii$500 ii; iiDemand iideposits: ii$600 ii
Bank iiC: ii
iiActual iireserves: ii$10 ii; iiLoans: ii$90 ii; iiDemand iideposits: ii$100
Based iion iithe iibalance iisheets iiabove iifor iithree iidifferent iibanks, iiwhich iiof iithe
iifollowing iiis iitrue, iiif iithe iireserve iirequirement iiis ii10 iipercent? ii
A) iiBank iiA iihas iino iiexcess iireserves ii
B) iiBank iiB iihas iino iiexcess iireserves
C) iiBank iiB iican iiincrease iiits iiloans iiby ii$500 ii
D) iiBank iiB iican iiincrease iiits iiloans iiby ii$40 ii
E) iiBank iiC iihas iiexcess iireserves ii- iiAnswers ii-D) iiBank iiB iican iiincrease iiits iiloans iiby
ii$40
To iifind iithe iiamount iithat iineeds iito iibe iiin iithe iiactual iireserves, iiyou iimust iitake ii10%
iiof iithe iidemand iideposits. iiThis iiresults iiin ii0.1 ii* ii600 ii= ii60. iiUsing iithis iinumber,
iisubtract iifrom iithe iiamount iiin iithe iiactual iireserves. iiThis iiyields ii100 ii- ii60 ii= ii40. iiThis
iimeans iithat iiBank iiB iican iiincrease iiits iiloans iiby ii$40
Which iiof iithe iifollowing iiwill iimost iilikely iilead iito iia iidecrease iiin iiinflationary
iiexpectations?
A) iiA iidecrease iiin iithe iimarginal iipropensity iito iisave
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