AP Maco Unit

An increase in net exports for country X will most likely be caused by which of the following?

• An increase in consumer spending

• An increase in direct foreign investment

• A decrease in the international value of the currency in country X

• An increase in the international value of the currency in country X

• An increase in the price level in country X

Which of the following would definitely move a country toward a current account deficit?

• An increase in exports

• An increase in imports

• An larger capital account deficit

• An increase in capital outflow

• A decrease in foreign aid provided to other countries

How will a nation’s production possibilities curve (PPC) and long-run aggregate supply (LRAS) curve change as a result of an increase in both the labor force and productivity?

• The LRAS curve will shift to the right, and the PPC will shift inward.

• The LRAS curve will shift to the right, and the PPC will shift outward.

• The LRAS curve will shift to the left, and the PPC will shift inward.

Assume the inflation rate in Mexico is significantly higher than its trading partners. Which of the following will occur to the demand, supply, and international value of the Mexican Peso?

• Demand Supply Value

  Increase Increase Depreciate

• Demand Supply Value

  Increase Decrease Appreciate

• Demand Supply Value

  Decrease Increase Appreciate

• Demand Supply Value

  Decrease Increase Depreciate

• Demand Supply Value

  Decrease Decrease Depreciate

Use the graph of a Phillips Curve to answer the question. Which of the following points illustrates an inflationary gap?

• X

• Y

• Z

What does the Production Possibilities Frontier represent? 

•   A catalog of all possible production options, represented as percentages.

•  The tradeoffs between possible production levels for two goods.

•  The amount that a society could produce if it devoted all its resources to producing one good.

•  The possible gains from international trade in two or more goods.

An increase in Korea’s demand for U.S. goods would cause the US dollar to

• Depreciate because of inflation

• Depreciate because the U.S. would be selling more dollars to Korea

• Depreciate because the U.S. money supply would increase as exports rise

• Appreciate because Korea would be buying more U.S. dollars

• Appreciate because Korea would be selling more U.S. dollars

The "Invisible Hand" is the term Economist Adam Smith used to describe:

• comparative advantage

• effect of self interest on markets

• diminishing marginal utility

• how some countries utilize resources better

Which of the following best describes the concept of 'opportunity cost'?

• The total cost of all resources used in production

• The cost of the next best alternative foregone

• The monetary cost of a good or service

• The cost of labor and capital combined

In the context of macroeconomics, what does the term 'aggregate demand' refer to?

• The total demand for goods and services within an economy

• The demand for a specific good or service

• The demand for goods and services by the government

• The demand for goods and services by foreign consumers