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WorksheetsAP Exam Prep - Test Taking Strategies
Total questions: 8
Worksheet time: 7mins
Question stem "show" means
you need to write out your answers in sentence format.
You must use a graph with proper labels.
You need to use arrows and dotted lines connecting to the axis.
use econ shorthand to explain.
When asked about changes in the long run aggregate supply, or economic growth, what must you address in your answer?
Disposable income
Aggregate demand
Capital Stock or Capital Formation
the natural rate of unemployment
What would affect the natural rate of unemployment?
Changes to unemployment benefits affecting frictional unemployment
Changes to technology allowing for better job matching, decreasing the rate of frictional unemployment
Decreases in aggregate demand, increasing cyclical unemployment
Changes in the season, affecting seasonal unemployment.
An increase in taxes will
↑Taxes --> ↑AD
↑Taxes --> ↓AD
↑Taxes --> ↓C--> ↓AD
↑Taxes --> ↓disposable income --> ↓C --> ↓AD
An increase in interest rates will
Attract foreign financial investment
encourage gross domestic private investment
discourage gross domestic private investment
decrease interest sensitive domestic expenditures
"Consumer confidence" is used to measure
how confident people feel about being able to repay big expenses in the future.
how confident people feel about the economy as a whole.
how secure people feel in their jobs.
inflation and the long run aggregate supply
The demand for money will change if
price levels change
real incomes change
the Fed buys bonds
the Fed targets a lower federal funds rate.
The quantity of money demanded will change if
price levels change
real incomes change
the Fed buys bonds
the Fed targets a lower federal funds rate
