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AP Macroeconomics: Final Exam Questions and Answers 100% Pass
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AP Macroeconomics: Final Exam Questions and Answers 100% Pass What is the most fundamental issue that economics addresses? - Use of scarce resources Inflation occurs when there is a sustained increase in - average price level An increase in spending in an economy will cause a multiplied increas...

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  • January 8, 2025
  • 9
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • ap macroeconomics final exam questions and answer

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  • AP Macroeconomics
  • AP Macroeconomics

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AP Macroeconomics: Final Exam
Questions and Answers 100% Pass

What is the most fundamental issue that economics addresses? - ✔✔Use of scarce resources


Inflation occurs when there is a sustained increase in - ✔✔average price level


An increase in spending in an economy will cause a multiplied increase in GDP because -

✔✔consumption increases as income increases


A contraction in the money supply will most likely change the nominal interest rate and aggregate

demand in what way in the short run? - ✔✔Nominal Interest Rate- Increase, Aggregate Demand-

Decrease


If the economy is in a severe recession, what policy action is most appropriate? - ✔✔Increasing both the

money supply and government spending


The most liquid asset is - ✔✔currency


If nominal interest rate is 8% and the expected inflation is 3%, the real interest rate is - ✔✔5%


An increase in the international value of the US dollar will most likely benefit - ✔✔retired US citizens

living overseas on their social security checks


What group would most likely gain from unanticipated inflation? - ✔✔Individuals who have borrowed

money at fixed interest rates


The purchase of securities on the open market by the Federal Reserve will - ✔✔Increase the supply of

money


Emily Charlene © 2025, All Rights Reserved.

, 2|Page


Total spending in the economy is most likely to increase by the largest amount if what occurs to

government spending and taxes? - ✔✔Government Spending- Increase, Taxes- Decrease


For an economy consisting of households and businesses only, what is consistent with the circular flow of

income and production? - ✔✔Households are suppliers of resources and consumers of goods and

services


If a banking system's reserves are $100 billion, demand deposits are $500 billion, and the system is fully

loaned-up, the the reserve ratio must be - ✔✔20% (100/500=0.2)


An increase in what would cause the long-run aggregate supply curve to shift to the right? - ✔✔Potential

Output


If an economy is operating with significant unemployment, an increase in what will most likely cause

employment to increase and the interest rate to decrease? - ✔✔Purchases of government bonds by the

central bank


To counteract a recession, the Federal Reserve should - ✔✔Buy securities on the open market and lower

the reserve requirement


An appreciation of the US dollar on the foreign exchange market could be caused by a decrease in what? -

✔✔US consumer price index


If the marginal propensity to consume (MPC) is 0.75, then a $100 increase in investment will result in a

maximum increase in equilibrium real GDP of - ✔✔$400 (Multiplier=4→4x100)


What would indicate that economic growth has occurred? - ✔✔LRAS curve shifts to the right


Crowding out refers to the decrease in - ✔✔private investment due to increased borrowing by the

government




Emily Charlene © 2025, All Rights Reserved.

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