AP Macroeconomics: Economic Indicators and Unemployment

What is the cyclical rate of unemployment in Flowerland?

• 5%

• 2%

• 4%

• 7%

What happens to Flowerland's aggregate demand when foreign demand for lavender oil increases?

• It decreases

• It stays the same

• It increases

• It is not affected

How does an increase in aggregate demand affect cyclical unemployment in Flowerland?

• It fluctuates

• It stays the same

• It decreases

• It increases

What is the price index for Flowerland in the year 2020?

• 110

• 120

• 130

• 100

If nominal income increased by 20% from 2019 to 2020, how does the standard of living change?

• Doubles

• Stays the same

• Decreases

• Increases

What is the unemployment rate in Zeta?

• 5%

• 10%

• 9%

• 7%

Is Zeta experiencing a recessionary gap?

• It is experiencing an inflationary gap

• Data is insufficient

• No

• Yes

What effect does stopping job search have on Zeta's labor force participation rate?

• It becomes zero

• It stays the same

• It decreases

• It increases

What happens to the unemployment rate in Zeta when individuals stop looking for work?

• It increases

• It decreases

• It stays the same

• It becomes zero

In the PPC graph for Zeta, where should point A be placed to represent the current state?

• At the origin

• Outside the curve

• Inside the curve

• On the curve