AP Macroeconomics Practice Test 12

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Question 12 questions

Time 14 minutes

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1. When government uses expansionary fiscal policy, the spending multiplier is often smaller than predicted because of

2. The best example of a negative supply shock to the economy would be

3. The Phillips curve represents the relationship between

4. If the economy is experiencing a recession, how will a plan to decrease taxes for consumers and increase spending on government purchases affect real gross domestic product (GDP) and the price level?

5. Of the following choices, the one most likely to be preferred by supply-side economists would be

6. Automatic stabilizers in the economy serve an important role in

7. The "crowding-out" effect is the result of

8. In a recession, expansionary monetary policy is designed to

9. A contractionary monetary policy will cause the nominal interest rate, aggregate demand, output, and the price level to change in which of the following ways?

NOMINAL INTEREST RATE     AGGREGATE DEMAND     OUTPUT     PRICE LEVEL

10. Which of the following is a tool used by the Fed to increase the money supply?

11. Which of the following monetary policies would lessen the effectiveness of expansionary fiscal policy?

12. Which of the following is an accurate statement of the money supply in the United States?