AP Macroeconomics Section 1 Exam Review

In a typical business cycle model, which stage immediately follows a trough?

• Expansion
• Contraction/recession
• Peak

The factors of production is / are ___________ needed to produce goods and services.

• things
• resources
• energy
• people

If you live on a fixed income, how will you be affected by inflation.

• You are hurt because your purchasing power has decreased.
• You are helped because your purchasing power has increased.
• You are helped because interest rates rise.
• You are hurt because interest rates rise.

Which of the following would NOT be considered part of the labor force?

• Tyler, a banker who feels he is overqualified for his job.
• Savana, who is unemployed but has attended  three job interview in the last month.
• Ricky, who has a part-time job but wants a full-time job.
• Garrett, a stay-at-home dad.

During a recession, which of the following is likely to occur?

• an increase in real wages
• an increase in production
• and increase in the GDP growth rate
• an increase in the unemployment rate

What is the size of the Labor Force?
Unemployed (Looking for job) = 20
Retired = 5
Prison = 2
School (full time, not looking for job) = 10
Employed = 180
Unemployed (not looking for job) = 20

• 180
• 200
• 220
• 237

The unemployment rate is calculated as the number of

• unemployed persons divided by number of employed persons
  
• persons in the labor force divided by the number of unemployed
  
• unemployed divided by size of the labor force
  
• employed persons divided by number of unemployed persons

The opportunity cost is the value of the _______ that had to be given up f the alternative that was chosen.

• all the items
• the next best alternative
• the least important alternative
• everything except the item that was chosen.

Scarcity arises because all societies have

• limited productive resources to satisfy unlimited wants
• unlimited productive resources to satisfy limited wants
• limited needs and unlimited wants
• unlimited needs and limited wants

The purpose of the production possibilities curve is to _________. 

• figure out whether employment is increasing
• practice graphing
• figure out the most efficient use of resources
• examine opportunity cost of coconuts and fish