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AP Macroeconomics: Final Exam Questions and Answers (latest update 2024)
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AP Macroeconomics: Final Exam Questions and Answers (latest update 2024)
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AP Macroeconomics: Final ExamQuestions and Answers (latest update
2024)
What is the most fundamental issue that economics
addresses? - Correct Answer ✅Use of scarce resources
Inflation occurs when there is a sustained increase in -
Correct Answer ✅average price level
An increase in spending in an economy will cause a multiplied
increase in GDP because - Correct Answer ✅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? - Correct Answer ✅Nominal Interest Rate-
Increase, Aggregate Demand- Decrease
If the economy is in a severe recession, what policy action is
most appropriate? - Correct Answer ✅Increasing both the
money supply and government spending
The most liquid asset is - Correct Answer ✅currency
,AP Macroeconomics: Final Exam
Questions and Answers (latest update
2024)
If nominal interest rate is 8% and the expected inflation is
3%, the real interest rate is - Correct Answer ✅5%
An increase in the international value of the US dollar will
most likely benefit - Correct Answer ✅retired US citizens
living overseas on their social security checks
What group would most likely gain from unanticipated
inflation? - Correct Answer ✅Individuals who have
borrowed money at fixed interest rates
The purchase of securities on the open market by the Federal
Reserve will - Correct Answer ✅Increase the supply of
money
Total spending in the economy is most likely to increase by
the largest amount if what occurs to government spending
and taxes? - Correct Answer ✅Government Spending-
Increase, Taxes- Decrease
, AP Macroeconomics: Final Exam
Questions and Answers (latest update
2024)
For an economy consisting of households and businesses
only, what is consistent with the circular flow of income and
production? - Correct Answer ✅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 - Correct Answer ✅20%
(100/500=0.2)
An increase in what would cause the long-run aggregate
supply curve to shift to the right? - Correct Answer
✅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? - Correct
Answer ✅Purchases of government bonds by the central
bank
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