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AP Macroeconomics Exam Questions With Correct Answers

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AP Macroeconomics Exam Questions With Correct Answers Movement on Short-Run Phillips Curve - answerShift in AD (graph movement is in opposite direction) Shift of Short-Run Phillips Curve - answerShift in SRAS (shift is in opposite direction) Shift of Long-Run Phillips Curve - answerFactors of ...

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  • October 15, 2024
  • 38
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • AP Macroeconomics
  • AP Macroeconomics
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©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM



AP Macroeconomics Exam Questions With
Correct Answers


Movement on Short-Run Phillips Curve - answer✔Shift in AD (graph movement is in opposite

direction)


Shift of Short-Run Phillips Curve - answer✔Shift in SRAS (shift is in opposite direction)


Shift of Long-Run Phillips Curve - answer✔Factors of Production/Shift in LRAS (shift is in

opposite direction)


Factors of Production - answer✔1. Land


2. Labor

3. Capital

4. Technology

5. Sometimes Foreign Trade


Shifters of Demand for Loanable Funds - answer✔1. Incentive to Invest


2. Contractionary Fiscal Policy (to the right)

, ©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM


Shifters of Supply of Loanable Funds - answer✔1. Incentive to Save


2. Monetary Policy

3. Expansionary Fiscal Policy (to the left)


Shifters of Money Supply - answer✔Monetary Policy


Shifters of Money Demand - answer✔1. Price Level


2. Income

3. Fiscal Policy


Shifters of Long-Run Aggregate Supply - answer✔Factors of Production


Shifters of Short-Run Aggregate Supply - answer✔1. Factors of Production (LRAS)


2. Input Costs

3. Supply Shock


Shifters of Aggregate Demand - answer✔1. GDP (or its components)


2. Monetary Policy

3. Fiscal Policy


PPC Graph - answer✔


Demand and Supply Graph - answer✔

, ©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM


Business Cycle - answer✔


Short Run AD/AS Graph - answer✔


Money Market Graph - answer✔


Loanable Funds Graph - answer✔


Investment Demand Graph - answer✔


Foreign Exchange Graph - answer✔


Phillips Curve - answer✔


GDP = C + I + G + Xn - answer✔The expenditure approach to measuring GD correlates well

with aggregate demand (AD)


GDP = W + I + R + P - answer✔The income approach to measuring GDP correlates well with

aggregate supply


Calculating Nominal GDP - answer✔The quantity of various goods produced in a nation times

their current prices, added together.


GDP Deflator - answer✔A price index used to adjust nominal GDP to arrive at real GDP. Called

the "deflator" because nominal GDP will usually overstate the value of a nation's output if there

has been inflation. The Consumer Price Index (CPI) is another commonly used price index.

, ©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM


GDP Growth Rate: - answer✔( Current year's GDP - Last year's GDP)/ (Last year's GDP) x 100.

The GDP growth rate is a percentage change in a nation's real output between one year and the

next.


The Inflation Rate via the CPI - answer✔(This year's CPI - Last year's CPI)/(Last year's CPI) x

100. The inflation rate is the percentage change in the CPI from one period to the next.


Real Interest Rate - answer✔the interest rate corrected for the effects of inflation; Nominal

interest rate - inflation rate


Unemployment Rate - answer✔(Number of unemployed/Number in the labor force) x 100. The

labor force includes all non-institutionalized people of working age who are employed or seeking

employment.


Money Multiplier - answer✔1/RRR where RRR equals the required reserve ratio. Application:

an initial injection of $1,000 of new money into a banking system with a reserve ratio of 0.1 will

generate up to $1,000 x (10) = $10,000 in total money.


Quantity Theory Of Money - answer✔MV = PQ = Y. A monetarist's view that explains how

changes in the money supply (M) will affect the price level (P) and/or real output assuming the

velocity of money (V) is fixed in the short run.


MPC + MPS = 1 - answer✔The fraction of an increase in disposable income that is spent (MPC)

plus the fraction that is saved (MPS) must equal 1.

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