AP Macroeconomics Practice Test 1

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Question 12 questions

Time 14 minutes

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1. Which of the following is included in U.S. GDP?

I. The market value of movies made in Africa by U.S. citizens

II. The market value of olive oil made in Italy and sold in the United States.

III. The market value of blue jeans made in the United States and sold in Japan

IV. The market value of wine made in the United States by Canadian citizens

2. Assume commercial banks save no excess reserves and the reserve requirement is 20 percent. How much money is created in new loans from all banks after this bank receives a deposit of $1000 ?

3. In a given period, the average price level in the country of Sherwood tripled, and Robin's income increased from $30,000 to $60,000. What happened to Robin's nominal and real income?

Nominal Income     Real Income

4. The upward sloping section of the aggregate supply curve can be explained by

5. Which of the following is a direct, accurate link within the circular flow?

6. Which of the following would be an example of fiat money?

7. Assume Astobia and Bonavia are countries that exercise free trade. If the real interest rate in Astobia decreases in comparison to Bonavia's real interest rate, then for Bonavia which of the following would be true of capital flow, the value of its currency, and its exports?

Capital Flow     Currency     Exports

8. Expansionary fiscal policy would best be prescribed to

9.

The figure illustrates a/an

10. The aggregate demand curve is

11. Assuming there is no statistical discrepancy, a trade surplus must be offset elsewhere in the

12. Kevin wants shoes and grows turnips. Lisa wants turnips and makes sheet metal. Bob wants sheet metal and makes shoes. Which function of money will cater most directly to the situation at hand?