Ap Macroeconomics Practice

AP Macro Econ MC Practice Test Chapters 33-34

Multiple Choice

Identify the letter of the choice that best completes the statement or answers the question.

____ 1. Which of the following explains why production rises in most years?

a.|increases in the labor force|

b.|increases in the capital stock|

c.|increases in technology|

d.|All of the above are correct.|

____ 2. On average over the past 50 years, the U.S. economy has grown at the rate of about

a.|1 percent per year.|

b.|3 percent per year.|

c.|4 percent per year.|

d.|6 percent per year.|

____ 3. A short period of falling incomes and rising unemployment is called a

a.|depression.|

b.|recession.|

c.|expansion.|

d.|business cycle.|

____ 4. During a recession the economy experiences

a.|rising employment and income.|

b.|rising employment and falling income.|

c.|rising income and falling employment.|

d.|falling employment and income.|

____ 5. Business cycles

a.|are easily predicted by competent economists.|

b.|have never occurred very close together.|

c.|can only be seen as changes in real GDP.|

d.|None of the above is correct.|

____ 6. Business cycles

a.|are explained mostly by fluctuations in consumption.|

b.|no longer are very important due to government policy.|

c.|are fluctuations in real GDP and related variables over time.|

d.|are easily predicted by competent economists.|

____ 7. The decrease in real GDP during a recession is

a.|mostly a decrease in investment spending.|

b.|mostly a decrease in consumption spending.|

c.|about equally divided between consumption and investment spending.|

d.|sometimes mostly a decrease in consumption and sometimes mostly a decrease in investment.|

____ 8. Most economists use the aggregate demand and aggregate supply model primarily to analyze

a.|short-run fluctuations in the economy.|

b.|the effects of macroeconomic policy on the prices of individual goods.|

c.|the long-run effects of international trade...