AP Macroeconomics Exam Correct Answers New Update (Verified A+ Pass)
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AP Macroeconomics
Institution
AP Macroeconomics
AP Macroeconomics Exam Correct Answers New Update (Verified A+ Pass)
GDP - Answers - total value of all final goods and services produced in a year within that country
What is excluded from GDP? - Answers - Intermediate goods, financial transactions, private and public transfer payments, ho...
AP Macroeconomics Exam Correct
Answers New Update (Verified A+
Pass)
GDP - Answers -✔✔ total value of all final goods and services produced in a year
within that country
What is excluded from GDP? - Answers -✔✔ Intermediate goods, financial
transactions, private and public transfer payments, home production
Expenditure Approach of GDP - Answers -✔✔ GDP=C+I+G+(X-M)
C= - Answers -✔✔ personal consumption by household
I= - Answers -✔✔ investment
G= - Answers -✔✔ Government purchases
X= - Answers -✔✔ exports
M= - Answers -✔✔ imports
Income Approach of GDP - Answers -✔✔ GDP= NI+depreciation-subsidies+net
income of foreigners
NI= - Answers -✔✔ sum of income earned by factors of production
Net Domestic Product - Answers -✔✔ GDP - Depreciation
Nominal Salary - Answers -✔✔ Actual number of dollars
Real Salary - Answers -✔✔ Purchasing power
Consumer Price Index - Answers -✔✔ Cost of Base Year Market Basket @ Current
Prices / Cost of Base Year @ Base Year Prices * 100%
Producer Price Index - Answers -✔✔ Similar to CPI, but just includes prices of
wholesale goods
, Inflation Between Years Y and Z - Answers -✔✔ [CPI in Year Z / CPI in Year Y] - 1 *
100%
Real GDP - Answers -✔✔ Nominal GDP/ CPI for same year at nominal figure * 100%
GDP Deflator - Answers -✔✔ Cost of Current Year Basket at Current Prices/ Cost of
Base Year Basket at Base Year Prices * 100
Frictional Unemployment - Answers -✔✔ As people search for best matches
Structural Unemployment - Answers -✔✔ Result of a skills mismatch
Discouraged Workers - Answers -✔✔ Those who are willing and able to work, but
become so frustrated in their attempts to find work that they stop trying
Natural Rate of Unemployment - Answers -✔✔ ~5%
Full Employment= - Answers -✔✔ Natural Rate of Employment
Okun's Law - Answers -✔✔ For every 1% increase in the unemployment rate above
the natural rate, output decreases by 2-3%.
Price Level = - Answers -✔✔ Average Level of ALl prices
Aggregate Supply Curve - Answers -✔✔
Aggregate Supply shifts right when... - Answers -✔✔ Inputs become cheaper, more
produce or more plentiful, government policies reduce production costs, good weather,
or macro disturbances (wars) end.
Say's Law - Answers -✔✔ Supply creates its own demand
Keynes: - Answers -✔✔ Investment demand depends more on expectations about the
prosperity of the economiy than on interest rates
Keynesian Analysis - Answers -✔✔ Wages can't adjust that quickly
Rational Expectations - Answers -✔✔ people learn to anticipate government policies
designed to influence the economy
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