AP Macroeconomics game 1

AP Macroeconomics

Game 1

Multiple Choice

The Phillips curve shows the relationship between inflation and what?

• Unemployment

• GDP

• Price level

Multiple Choice

An increase in costs will

• Shift aggregate demand

• Shift aggregate supply

Multiple Choice

Inflation:

• Always reduces the cost of living

• Reduces the purchasing power

Multiple Choice

If people are made unemployed because of a fall in aggregate demand this is known as:

• Cyclical unemployment

• Frictional unemployment

Multiple Choice

CPI measures

• the value of GDP in base year values

• prices of raw materials purchased by firms

• prices of imports, but not exports

• prices of a basket of goods purchased by consumers

Multiple Choice

If inflation is higher than expected then

• borrowers win

• lenders win

• everybody wins

• everybody loses

Multiple Choice

Leakage from circular flow would be

• Exports

• Taxes

• Government Spending

• Imports

Multiple Choice

Frictional unemployment

• worker replaced by robots

• worker voluntarily quits to look for a better job

• worker laid off because of downturn in business

• worker switches from part time to full time

Multiple Choice

On the PPC which point would represent a recession?

• on the curve

• inside the curve

• outside the curve

• indeterminate