AP Macroeconomics Exam Questions With Correct Answers
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Course
AP Macroeconomics
Institution
AP Macroeconomics
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 ...
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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