WorksheetsAP Macro MCQs practice test
Total questions: 20
Worksheet time: 11mins
Automatic stabilizers:
prevent inflation.
prevent inflation and recessions from occurring
are government policies already in place that promote deficit spending during expansions and surplus budgets during recessions.
are government policies already in place that promote deficit spending during recessions and surplus budgets during expansions.
the diagram blow:
It shows how fiscal policy can work to cure inflation.
It shows how fiscal policy can work to close a recessionary gap.
It portrays the Phillips tradeoff.
It portrays stagflation.
The appropriate fiscal policy to remedy inflation calls for
the federal government to run a deficit.
the federal government to run a surplus.
increased taxes and government spending.
decreased government spending and taxes.
The weight given to housing in a country's Consumer Price Index (CPI) has increased. This means that
house prices are increasing faster than the prices of other products.
spending on housing as a percentage of total spending has increased.
the price of houses has increased.
the total amount spent on housing has risen.
Real GDP will increase
only if the price level rises.
only if the price level falls.
only if the quantity of final goods and services produced rises.
if either the price level rises, or the quantity of final goods and services produced rises
The production possibilities curve is concave because
As production of goods and services increases, the opportunity costs decrease
As production of goods and services increases, the opportunity costs increase
Taxes increase as the production of a good increases
Both B and C
Which of the following are not examples of a market economy?
Freedom of sellers to enter and exit the market
Government ownership of the factors of production
Competition among sellers of products
Unlimited consumer choice
Which of the following will cause an outward shift of the PPC?
Decrease spending on educational training for employees
A natural disaster creating extreme limitations of a natural resource
A decrease in a nation’s birthrate, thus decreasing the labor force
An increase in skilled worker
A point inside the PPC is
Attainable and efficient
Attainable but inefficient
Unattainable and efficient
Unattainable and inefficient
Which of the followings are included in GDP
intermediate goods
nonproduction transaction
import
non-market and illegal activitie
Which of the following represents a surplus in the financial account of the U.S. balance of payments?
China imports cars from the U.S
The U.S government increases subsidies for low-income family
U.S company invests on Korean company.
Foreigners purchase U.S. securities.
Which of the followings will cause the U.S dollar appreciates?
An increase in government spending
A contractionary monetary policy
A decrease in national debt
An increase in individuals’ saving
If the U.S dollar and Chinese yuan are traded with each other only. Which of the following causes appreciation of the dollar.
Lower interest rates in the United States relative to China
Lower price levels in China relative to the U.S
Increasing GDP per capita in China, increasing imports from the U.S.
Increase American preference in consuming Chinese goods.
If Daniel withdraws $4000 from his saving account and deposit the money into checking account, what is the change of money supply of M2?
$4000
$0
No change
$2000
$400
A restrictive monetary policy is most appropriate in which of the situations?
Budget Deficit
Budget Surplus
High cyclical employment
High Inflation
Low Interest Rates
The Loanable Funds Market shows the relationship between which of the following?
Borrowers and Lenders
Investors and Employers
Savers and Borrowers
Bank and Savers
Federal Reserve and Savers
Having a high Marginal Propensity to save implies which of the following?
A low Marginal Propensity to consume
A lower Consumer Price Index
A higher Interest Rate
A higher Federal Funds Rate
A low Marginal Tax Rate
What will cause a rightward shift of the short-run Phillips Curve?
Decrease in AD
Increase in AD
Increase in the Money Supply
Increase in the AS
Decrease in the AS
What will happen if the AD shifts to the right?
The unemployment rate increases
The Short run Phillips Curve shift to the left
There is no shift for the SRPC
the currency will depreciate.
Which of the following causes crowding out?
Government increases their spending deficit.
People expected the bank might close down
The government exports more than imports
Extremely high interest rate.
