Ap macro review
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AP Macro Review. Unit 2 Measurement of Economic Systems. 1. In the simple circular flow model:. Individuals and households are sellers of resources and demanders of products Households are sellers of products and demanders of resources

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Ap macro review

AP Macro Review

Unit 2

Measurement of Economic Systems


1 in the simple circular flow model

1. In the simple circular flow model:

  • Individuals and households are sellers of resources and demanders of products

  • Households are sellers of products and demanders of resources

  • The GDP is represented by the number of households and businesses in the economy

  • Businesses are sellers of resources and demanders of products

  • Businesses are sellers of products and sellers of resources


2 when economists refer to the gross domestic product gdp they mean

2. When economists refer to the gross domestic product (GDP), they mean:

  • All final goods and services produced in an economy in a year

  • All intermediate and final goods and services produced in an economy in a year

  • All final goods and services produced in an economy in a five-year time period

  • All final goods and services produced in an economy in a year, including overseas branches and divisions

  • The total expenditure of consumer and government spending in an economy in a given year


Ap macro review

3. The most significant difference between gross domestic product and gross national product would be:

  • Government spending

  • Consumer income

  • Net income from foreign investments

  • Consumer spending minus government investments

  • A and C


4 an example of a final good calculated into the gdp for the year would be

4. An example of a final good calculated into the GDP for the year would be:

  • A computer chip bought by IBM to be used in a computer

  • A used car sold to a consumer

  • A new car sold to a consumer

  • The lumber used to construct a new house

  • All of the above


5 an example of an intermediate good would be

5. An example of an intermediate good would be:

  • A new car sold to a consumer

  • A car engine

  • A new laptop

  • A new textbook to use for a college class

  • All of the above


6 the formula for calculating gross domestic product is

6. The formula for calculating gross domestic product is:

  • C – I + G + (X –M)

  • C + I + G – (X + M)

  • C + G + (X – M)

  • (C + G)(I +((X – M))

  • C + I + G + (X – M)


Ap macro review

7. Jason and Mary purchased a new house in 2012 for $300,000. This purchase would be included in the GDP as:

  • Consumer savings

  • Government investment

  • Investment

  • Consumption of private fixed capital

  • Consumer spending


Ap macro review

8. Elaine quit her job as a teaching assistant and went back to school to be a guidance counselor. Last year she received her master’s degree and is currently looking for a job. Elaine is considered:

  • Cyclically unemployed

  • Frictionally unemployed

  • Structurally unemployed

  • Seasonally unemployed

  • Not part of the labor force


9 full employment occurs when

9. Full employment occurs when:

  • Cyclical unemployment does not exist

  • Seasonal unemployment does not exist

  • Frictional unemployment does not exist

  • Structural unemployment does not exist

  • Both cyclical and frictional unemployment do not exist


10 stagflation occurs when

10. Stagflation occurs when:

  • Real GDP increases and price levels decrease

  • Real GDP decreases and price levels decrease

  • Unemployment and price levels increase

  • Nominal GDP decreases and price levels increase

  • GDP decreases and the price level decreases


11 if a teacher loses his or her job due to low student enrollment he or she would be considered

11. If a teacher loses his or her job due to low student enrollment, he or she would be considered:

  • Cyclically unemployed

  • Seasonally unemployed

  • Frictionally unemployed

  • Structurally unemployed

  • Not part of the labor force


Ap macro review

12. Dennis decides to loan his friend some money. He would like to see a 5% return on the loan. If the current rate of inflation is 15%, what should he charge as an interest rate?

  • 10%

  • 20%

  • 25%

  • 3%

  • 12%


Ap macro review

13. Jessica received her college degree in computer science and was offered a job at IBM. She decides to take a year off and travel throughout Europe. What would this decision do to the unemployment rate?

  • An increase in the unemployment rate

  • A decrease in the unemployment rate

  • An increase in cyclical unemployment

  • A decrease in structural unemployment

  • No change in the unemployment rate


Ap macro review

14. Suppose the gross domestic product is $15 million, where consumer spending is $4 million, investments are $2 million, government spending is $5 million, and exports are $4 million. How much is spend on imports?

  • $2 million

  • $3 million

  • $5 million

  • $4 million

  • $0


15 when constructing a price index a base year refers to

15. When constructing a price index, a base year refers to:

  • The average price level of goods and services

  • A point of reference to compare real values over time

  • The percentage change in the price index over time

  • The top of the business cycle signaling the end of expansion

  • A collection of goods and services that represent what is consumed in an economy for the year


16 nominal gdp refers to

16. Nominal GDP refers to:

  • The value of current production, but using prices from a set point in time

  • The value of current production, but using prices gathered over the past five years

  • The value of current production at current prices

  • Prices at the peak of the business cycle

  • The value of current production at the trough of the business cycle subtracted from that at the peak of the business cycle


Answer key

Answer Key

  • A

  • A

  • C

  • C

  • B

  • E

  • C

  • B

  • A

  • C

  • A

  • B

  • E

  • E

  • B

  • C


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