WorksheetsAP Macroeconomics review
Total questions: 32
Worksheet time: 42mins
Name
Class
Date
1.
Which would be least appropriate for expansionary fiscal policy
a)
Increase taxes
b)
Decrease taxes
c)
Increase government spending
d)
Combination of decreasing taxes and increasing spending
2.
This group is responsible for implementing fiscal policy
a)
U.S. President
b)
Federal Reserve Board
c)
Council of Economic Advisors
d)
U.S. Congress
3.
The goal of fiscal policy is to achieve full employment by shifting this curve:
a)
Long Run Aggregate Supply
b)
Aggregate Demand
c)
Short Run Aggregate Supply
d)
Phillips
4.
Contractionary fiscal policy would most likely be used during...
a)
recessions
b)
times where economy is operating at full employment
c)
periods of sustained, demand pull inflation
d)
Anytime we have a negative GDP gap
5.
If the MPC is .80, the government spending multiplier is:
a)
4
b)
5
c)
3
d)
2
6.
What is NOT a consequence of expansionary fiscal policy?
a)
AD shifts Right
b)
Increased Price levels
c)
increased output
d)
increased unemployment
7.
What is NOT a consequence of contractionary fiscal policy
a)
aggregate demand shifts left
b)
price level increases
c)
unemployment increases
d)
output decreases
8.
During a recession, which of the following is likely to occur?
a)
an increase in real wages
b)
an increase in production
c)
and increase in the GDP growth rate
d)
an increase in the unemployment rate
9.
Based on an examination of the graph, what conclusions can be drawn regarding the production possibilities of corn and jeans?
a)
The blue curve indicates a decrease in the capacity to produce both corn and jeans, resulting in economic growth.
b)
The blue curve indicates an increase in the capacity to produce both corn and jeans, resulting in economic growth.
c)
The blue curve indicates an increase in the capacity to produce both corn and jeans, resulting in economic decline.
d)
The blue curve indicates a decrease in the capacity to produce both corn and jeans, resulting in economic decline.
10.
Which of the following would NOT be considered part of the labor force?
a)
Tyler, a banker who feels he is overqualified for his job.
b)
Savana, who is unemployed but has attended three job interview in the last month.
c)
Ricky, who has a part-time job but wants a full-time job.
d)
Garrett, a stay-at-home dad.
11.
If Spain's opportunity cost for producing wine is 1.5 cars and France's opportunity cost for producing wine is 0.8 cars, which country has a comparative advantage in wine production?
a)
France
b)
Spain
12.
Scarcity arises because all societies have
a)
limited productive resources to satisfy unlimited wants
b)
unlimited productive resources to satisfy limited wants
c)
limited needs and unlimited wants
d)
unlimited needs and limited wants
13.
The factors of production is / are ___________ needed to produce goods and services.
a)
things
b)
resources
c)
energy
d)
people
14.
The opportunity cost is the value of the _______ that had to be given up f the alternative that was chosen.
a)
all the items
b)
the next best alternative
c)
the least important alternative
d)
everything except the item that was chosen.
15.
The US can produce 1 ton of sugar using 4 acres of land, or they can produce 1 ton of avocados using 6 acres.
Ecuador can produce 1 ton of sugar using 5 acres of land or 1 ton of avocados using 4 acres.
Which country should produce avocados?
Ecuador can produce 1 ton of sugar using 5 acres of land or 1 ton of avocados using 4 acres.
Which country should produce avocados?
a)
Ecuador
b)
US
c)
not enough information
16.
The opportunity cost of increasing production from 7 to 9 trucks is
a)
1 boat
b)
2 boats
c)
2 trucks
d)
3 boats
17.
If a mass immigration occurs, the production possibilities curve can shift
a)
No shift
b)
Inward
c)
Outward
d)
Outward on one axis only
18.
What occurred between June and July of 2016?
a)
Inflation
b)
Hyperinflation
c)
Deflation
d)
Cost-push Inflation
19.
A general rise in overall prices is called:
a)
Deflation
b)
Inflation
c)
Consumer Price Index
d)
Federal Reserve
20.
Only producing certain goods instead of everything you need is known as
a)
importing
b)
specialization
c)
balance of trade
d)
absolute advantage
21.
Suppose there is a production possibilities frontier (PPF) for wine and cheese. Which of the following situations would shift the PPF inward (toward the origin)?
a)
A. A severe weather event that destroys much of the economy’s productive capacity.
b)
B. Improved education of the work force.
c)
C. Discovery of a new, cheaper source of milk for making cheese.
d)
D. Increased popularity of wine, as compared with cheese.
22.
What is the size of the Labor Force?
Unemployed (Looking for job) = 20
Retired = 5
Prison = 2
School (full time, not looking for job) = 10
Employed = 180
Unemployed (not looking for job) = 20
Unemployed (Looking for job) = 20
Retired = 5
Prison = 2
School (full time, not looking for job) = 10
Employed = 180
Unemployed (not looking for job) = 20
a)
180
b)
200
c)
220
d)
237
23.
What does point B represent?
a)
Production at greater than the country's minimum potential
b)
Production is less than the country's minimum potential
c)
Production is greater than the country's maximum potential
d)
Production at the country's maximum potential
24.
The opportunity cost of moving from F to C is
a)
4 coconuts
b)
3 pizzas
c)
0 coconuts
d)
0 pizzas
25.
If you live on a fixed income, how will you be affected by inflation.
a)
You are hurt because your purchasing power has decreased.
b)
You are helped because your purchasing power has increased.
c)
You are helped because interest rates rise.
d)
You are hurt because interest rates rise.
26.
What does point Y represent?
a)
Efficiency
b)
Unattainable / infeasible
c)
Inefficency
d)
Nothing
27.
The opportunity cost of moving from b to d is
a)
7 pizzas
b)
2 coconuts
c)
4 coconuts
d)
0 pizzas
28.
Full Employment means a 0% unemployment rate
a)
True
b)
False
29.
A rightward shift in the aggregate demand curve could most likely be caused by which of the following?
a)
a decrease in consumer confidence
b)
a decrease in investment spending
c)
an increase in the price level
d)
the purchase of government securities by the central bank
30.
Which of the following is MOST likely to promote economic growth?
a)
A decrease in business tax credits for investment spending
b)
A decrease in federal student education grants
c)
An increase in investment in tools and machinery
d)
A decrease in the labor force participation rate
31.
Assume that the nominal interest rate is 10 percent. If the expected inflation rate is 3 percent, the real interest rate is
a)
0.5%
b)
3%
c)
7%
d)
10%
32.
A country’s currency might appreciate in value because of which of the following?
a)
A higher price level relative to the rest of the world
b)
A higher real interest rate relative to the rest of the world
c)
Decreased demand for the country’s currency
d)
Increased supply of the country’s currency on the world market
100 %
