AP Macroeconomics Practice Test 20

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Question 12 questions

Time 14 minutes

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1. A policy supported by supply-side economists would be

2. According to the quantity theory of money, increasing the money supply serves to

3. Of the following choices, the most direct exchange in the circular flow model of a private closed economy is when

4. Suppose that the federal government reclassified the purchase of a new home as consumption spending rather than investment spending. This decision would

5. Suppose that current disposable income is $10,000 and consumption spending is $8,000. For every $100 increase in disposable income, saving increases $10. Given this information,

6. When we observe an unplanned decrease in inventories, we can expect

7. Stagflation is the result of

8. If the short-run aggregate supply curve is horizontal, it is because

9. In a private closed economy, which of the following statements is true?

10. Which of the following is true of a typical contraction of the business cycle?

11. Which of the following is most likely to produce stronger economic growth over time?

12. If $100 of new autonomous private investment were added to an economy with a marginal propensity to consume of .90, by how much would aggregate demand shift to the right?