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Practice AP Macroeconomics Exam

sample ap macroeconomics questions ap macroeconomics exam practice questions


Q:1-Which of the following is not a part of the business cycle?
Mark one answer:

Expansion
Contraction
Plateau
Trough



Q:2-Which of the following is an example of an automatic stabilizer?
Mark one answer:

Unemployment insurance
Corporate layoffs
Expansionary monetary policy by a Central Bank
Deficit spending by governments


Q:3-Each of the following is included in the gross domestic product EXCEPT _____.
Mark one answer:

Net Exports
Transfer payments
Consumption
Government Expenditures


Q:4-In a certain year, nominal gross domestic product grew by 8 percent. The inflation rate was 4 percent. Real gross domestic product for this year was _______.
Mark one answer:

grew by 8 percent
remained constant
grew by 4 percent
grew by 12 percent


Q:5-Which of the following is the most effective fiscal policy if potential GDP exceeds current GDP?
Mark one answer:

The Federal Reserve buys US Treasury bonds.
The tax rate increases.
The Federal Reserve sells US Treasury bonds.
Government spending increases.


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Q:6-If the income level in a given economy increases by $100 and spending increases by $80, the marginal propensity to save in that economy is equal to which of the following?
Mark one answer:

0.5
0.8
0.75
0.2


Q:7-At a particular bank, the reserve ratio is 10% and excess reserves are $300. The maximum expansion of the money supply that can be generated by that bank is ________.
Mark one answer:

$3000
$30,000
$300
$30


Q:8-At the beginning of a specified fiscal year, the national debt is equal to $1000. At the end of the fiscal year, the national deficit is equal to $100. The national debt at the end of the fiscal year is equal to ________.
Mark one answer:

$100
$1000
$900
$1100


Q:9-A rightward shift of the aggregate demand curve will necessarily result in which of the following?
Mark one answer:

A decrease in output and an increase in price level
An increase in output and a decrease in price level
An increase in output and an increase in the price level
A decrease in output and a decrease in the price level


Q:10-An increase in the money supply curve would most likely result in which of the following situations?
Mark one answer:

A decrease in the quantity of money available
A decrease in the real interest rate
An increase in the real interest rate
No effect on the real interest rate


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