AP Macro Graphs

What is the primary purpose of the Production Possibilities Curve?

• To determine the equilibrium price
• To show the maximum production capacity using all resources

• To show the maximum possible production levels
• To analyze consumer preferences

During a recession in the Business Cycle, what typically happens to unemployment?

• Unemployment typically decreases
• Unemployment typically increases
• Unemployment remains constant
• Unemployment becomes irrelevant

Which phase of the Business Cycle is characterized by increasing GDP and decreasing unemployment?

• Recovery

• Trough
• Peak
• Recession

What does a shift to the left in the Aggregate Demand curve indicate?

• Increase in overall demand
• No change in overall demand
• A decrease in consumer spending

• Shift in supply curve

What happens to the economy when there is an increase in aggregate demand?

• Unemployment decreases

• Stagnation in economic activity
• Reduction in government spending
• Decrease in unemployment rate

What does the vertical long-run Phillips Curve represent?

• Full Employment

• A horizontal long-run Phillips Curve
• A short-term trade-off between inflation and unemployment
• A direct relationship between inflation and unemployment

What does the Phillips Curve illustrate about the economy?

• The Phillips Curve illustrates the relationship between GDP and inflation.
• The Phillips Curve illustrates the relationship between interest rates and unemployment.
• The Phillips Curve illustrates the relationship between government spending and economic growth.
• The trade-off between inflation and unemployment

What role does the central bank play in the Money Market graph?

• Regulatory role in influencing interest rates and controlling the money supply
• Setting stock market prices
• Issuing currency directly to consumers
• Regulating international trade agreements

What is the main focus of the Loanable Funds Market?

• Supply and demand of goods and services
• Stock market trends
• Government fiscal policy
• Setting real interest rates

What does the Foreign Exchange Market graph represent?

• The Foreign Exchange Market graph represents the exchange rate between two currencies over a period of time.
• The Foreign Exchange Market graph represents the stock market
• The Foreign Exchange Market graph represents the price of gold
• The Foreign Exchange Market graph represents the weather forecast