Economic Concepts and Relationships

This video provides a comprehensive review of key macroeconomic concepts for the AP exam, including economic systems, GDP, unemployment, inflation, the AS-AD model, fiscal and monetary policy, financial markets, and foreign exchange. It is designed for students with a foundational understanding of macroeconomics who need a quick review before the exam.

What is the primary reason goods and services are considered scarce?

• They are not needed.

• They are expensive.

• Factors of production are limited.

• They are unlimited.

Which of the following is NOT included in the calculation of GDP?

• Net exports

• Government purchases

• Used items

• Gross investment

What type of unemployment occurs when there is a mismatch between the skills of workers and the jobs available?

• Structural unemployment

• Frictional unemployment

• Seasonal unemployment

• Cyclical unemployment

In the AS-AD model, what does a rightward shift in the aggregate demand curve indicate?

• A decrease in price level

• An increase in real GDP

• A decrease in unemployment

• An increase in inflation

What is the main purpose of expansionary fiscal policy?

• To decrease the money supply

• To increase taxes

• To reduce government spending

• To fight unemployment

Which of the following is NOT a function of money?

• Medium of exchange

• Store of value

• Unit of account

• Source of income

What happens to the nominal interest rate when the money supply increases?

• It decreases

• It increases

• It becomes negative

• It remains unchanged

What is the relationship between inflation and unemployment in the short run according to the Phillips curve?

• Direct relationship

• No relationship

• Inverse relationship

• Cyclical relationship

If a country's currency appreciates, what is the likely effect on its net exports?

• Net exports remain unchanged

• Net exports become negative

• Net exports decrease

• Net exports increase

What is the balance of payments composed of?

• Financial account and capital account

• Current account and trade balance

• Current account and financial and capital account

• Trade balance and financial account