How to Approach Each Question Type ❮ 35Example
In the long run, the Phillips curve is
Before you even look at the options, you should know that the answer is
“vertical”. Find that option, and then quickly confirm to yourself that the
others are indeed wrong.- Never say never. Words like “never” and “always” are called absolute qualifiers. If these
words are used in one of the choices, it is rarely the correct choice.
Example
Which of the following is true about the level of real GDP in the short run?
A. real GDP is always falling.
B. real GDP is never at full-employment.
If you can think of any situation where the statements in (A) and (B) are untrue,
then you have discovered distractors and can eliminate these as valid choices.- Easy is as easy does. It’s exam day and you’re all geared up to set this very difficult test on
its ear. The first question looks like a no-brainer. Of course! The answer is 7%, choice (C).
But rather than smiling at the satisfaction that you knew the answer, you doubt yourself.
Could it be that easy? Sometimes they are just that easy. - Sometimes a blind squirrel finds an acorn. Should you guess? If you have no clue which
choice is correct, guessing is a no-lose strategy. Even with a wild guess, you have a
20 percent chance of getting it right. If you leave it blank, you have no chance. I am
sure that you can do the math. - Draw it, nail it. Many questions can be easily answered if you do a quick sketch in the
margins of your test book. Hey, you paid for that test book; you might as well use it.
Example
In an economy with a vertical aggregate supply curve, a decrease in consumer
confidence will cause output and the price level to change in which of the
following ways?OUTPUT PRICE LEVEL
(A) No change Increase
(B) Decrease Decrease
(C) Increase No change
(D) No change No change
(E) No change Decrease
These types of questions are particularly difficult because the answer requires
two ingredients. It also requires a very thorough understanding of the AD/AS
model, and here is where your graph comes in. The first thing you should do
is quickly draw the situation given to you in the question: a vertical AS curve.
Show a downward-sloping AD curve shifting to the left and you can see that
option (E) is correct. The graph speaks for itself.- Come back, come back! There are 60 questions, and none of these is worth more than
the other. If you are struggling with a particular question, circle it in your exam book