Macro FRQ Practice- 2017 #1- Phillips Curve, AD/AS, Forex

Jacob Clifford emphasizes the importance of practicing macroeconomics by working on questions similar to those on the AP exam. He reviews the 2017 free-response question, focusing on the Phillips curve and its implications. The video covers fiscal and monetary policies, graph analysis, and the effects of GDP changes on currency supply and depreciation.

What is the best way to ensure readiness for a macroeconomics test?

• Watching video tutorials

• Practicing questions similar to test questions

• Reading the textbook multiple times

• Discussing with peers

What key graph were students asked to draw in the 2017 AP exam's first free-response question?

• Aggregate Demand Curve

• Lorenz Curve

• Phillips Curve

• Aggregate Supply Curve

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

• Positive relationship

• Fluctuating relationship

• No relationship

• Negative relationship

What does a recessionary gap indicate in terms of unemployment?

• Unemployment is below the natural rate

• Unemployment is above the natural rate

• Unemployment is not affected

• Unemployment is at the natural rate

What happens to the short-run aggregate supply if no policy is implemented during a recession?

• It decreases

• It remains the same

• It fluctuates randomly

• It increases

Which fiscal policy can help reduce unemployment during a recession?

• Increasing government spending

• Reducing government spending

• Raising interest rates

• Increasing taxes

How is an increase in government spending represented on the aggregate demand and supply graph?

• Rightward shift of aggregate supply

• Leftward shift of aggregate supply

• Leftward shift of aggregate demand

• Rightward shift of aggregate demand

What is the effect on a country's currency supply when GDP increases?

• Currency supply fluctuates

• Currency supply decreases

• Currency supply increases

• Currency supply remains unchanged

Why does an increase in GDP lead to a higher supply of currency?

• Due to higher domestic savings

• Because of increased imports

• Due to reduced foreign investment

• Because of increased exports

What happens to a country's currency when its supply increases?

• It depreciates

• It remains stable

• It appreciates

• It becomes more volatile