AP Macroeconomics Practice Test: Aggregate Demand

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Question 5 questions

Time 6 minutes

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1. Operating in the intermediate range of the aggregate supply curve, an increase in aggregate demand results in an increase in

2. If the marginal propensity to consume is 0.8, what is the largest total increase in GDP that can result from $500 of new spending?

3. Stagflation occurs when

4. A recessionary gap exists when the short-run equilibrium level of real GDP

5.

On the graph of the aggregate supply and demand model above a recessionary gap exists, and the economy is in