Unit 5 AP Macro

When making a decision, the next best alternative is called

• The production possibilities

• The opportunity cost

• Scarcity

• The absolute advantage

• Efficiency

Refer to figure A. What would be the effect of a price floor at $60

• It would be ineffective

• A shortage of 50

• Quantity demanded would increse

• a shortage of 100

• a surplus of 100

Which of the following is the best example of physical capital?

• A $100,000 business loan from a bank

• A business hiring 10,000 workers at a factory

• A truck for a delivery company

• An oven for a family of four

• An increase in construction jobs

According to the graph above, which of the following statements about the economy is true?

• The economy is in long-run equilibrium.

• The LRAS curve will automatically shift to
  the right, restoring long-run equilibrium.

• In the short run, if wages are sticky,the AD
  will shift to the right, lowering prices.

• Wages will eventually decrease, restoring full
  employment in the long run.

Progressive tax structure is when

• the tax rate declines as income increases

• the tax rate increases as income increases

• the tax rate remains the same, regardless of size of income

• the tax rate increases the total volume of consumer expenditures

In the context of macroeconomics, what does GDP stand for?

• Gross Domestic Product

• General Domestic Product

• Gross Development Product

• General Development Product

Which of the following is a tool of monetary policy?

• Government spending

• Taxation

• Open market operations

• Subsidies

What is the primary goal of fiscal policy?

• To control inflation

• To reduce unemployment

• To manage the level of aggregate demand

• To regulate the stock market

Which of the following best describes the concept of 'aggregate demand'?

• 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 countries

What is the 'natural rate of unemployment'?

• The unemployment rate when the economy is at full employment

• The unemployment rate during a recession

• The unemployment rate when inflation is zero

• The unemployment rate when the economy is growing