AP Macro Mid-Term III

The typical production possibilities curve is:

• an upsloping line that is bowed out from the origin.

• a downsloping line that is bowed in toward the origin.

• a downsloping line that is bowed out from the origin.

• a straight upsloping line.

Economics may best be defined as the:

• interaction between macro and micro considerations.

• social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity.

• empirical testing of value judgments through the use of logic.

• study of why people are rational.

If there is a surplus of a product, its price:

• is below the equilibrium level.

• is in equilibrium.

• will rise in the near future.

• is above the equilibrium level.

If real GDP in a particular year is $80 billion and nominal GDP is $240 billion, the GDP price index for that year is:

• 100.

• 200.

• 240.

• 300.

If a nation's real GDP is growing by 5 percent per year, its real GDP will double in approximately:

• 22 years.

• 8 years.

• 20 years.

• 14 years.

Real GDP refers to:

• the value of the domestic output after adjustments have been made for environmental pollution and changes in the distribution of income.

• GDP data that embody changes in the price level but not changes in physical output.

• GDP data that do not reflect changes in both physical output and the price level.

• GDP data that have been adjusted for changes in the price level.

The natural rate of unemployment is the:

• unemployment rate experienced at the depth of a depression.

• full-employment unemployment rate.

• unemployment rate experienced by the least-skilled workers in the economy.

• unemployment rate experienced by the most-skilled workers in the economy.

An improvement in production technology will:

• increase equilibrium price.

• shift the supply curve to the left.

• shift the supply curve to the right.

• shift the demand curve to the left.

The production possibilities curve shows:

• the various combinations of two goods that can be produced when society employs all of its scarce resources.

• the minimum outputs of two goods that will sustain a society.

• the various combinations of two goods that can be produced when some resources are unemployed.

• the ideal, but unattainable, combinations of two goods that would maximize consumer satisfactions.

Which of the following will not cause the demand for product K to change?

• A change in the price of close-substitute product J.

• An increase in incomes of buyers of product K.

• A change in the price of product K.

• A change in consumer tastes for product K.