AP Macroeconomics Practice Test 10

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Question 12 questions

Time 14 minutes

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1. A decline in the demand for money could be the result of

2. An important assumption underlying monetarism is that

3. Which of the following policies is most likely to bring about economic growth in the long run?

4. An increase in the price level and a decrease in real GDP in the short run could be the result of

5. In 2004, the United States had a trade deficit of $603 billion; therefore,

6. GDP measures a country's level of

I. production.

II. stability.

III. income.

7. Which of the following lists contains only Fed actions that will increase the money supply?

8. Which of the following lists contains only policies that will close an inflationary gap?

9. Suppose the exchange rates are 0.5 British Pound per dollar; 10 Mexican Pesos per dollar; and 100 Chinese Yuan per dollar. Further suppose that a Big Mac costs 3 dollars in America; 2 pounds in England; 50 pesos in Mexico; and 200 yuan in China. In which country is a Big Mac most expensive?

10. Potential GDP will fall, ceteris paribus, if

11. Suppose that an expansionary fiscal policy leads to a large increase in real output and a small increase in the price level. From this it can be inferred that

12. Imagine someone who is not looking for work because they are embarrassed in the interview process when their inability to read is revealed. However, this person would take just about any job that was offered. According to the Bureau of Labor Statistics this person is