Economics Micro & Macro (CliffsAP)

Macroeconomics Full-Length Practice Test 2

Section I

■ 60 multiple choice questions 70 minutes

Section II

■ 1 long free-response question and

■ 2 short free-response questions 10 minutes for planning

50 minutes for writing

Total Time: 2 Hours and 10 Minutes

Macroeconomics Section I: Multiple-Choice Questions

Directions: You have 70 minutes to complete the 60 multiple-choice questions in this section of the exam.

1. Which of the following would cause the
   production possibilities curve to shift outward (to
   the right)?
   A. Reopening an oil factory that had been
   closed
   B. Rehiring oil workers
   C. Using machinery for steel production instead
   of oil production
   D. Becoming more efficient at making oil
   E. Using machinery for oil production instead
   of steel production


2. If in 1976, nominal GDP grew by 11 percent and
   real GDP grew by 5 percent, what would be the
   inflation rate for this year?
   A. 2 percent
   B. –6 percent
   C. 6 percent
   D. 3 percent
   E. 16 percent


3. Of the following types of unemployment, which
   one is structural unemployment?
   A. A software engineer who leaves his job to
   move to Spain
   B. A worker who loses his job during a
   recession
   C. An assembly line worker who is replaced by
   a machine
   D. A teacher who is unemployed during the
   summer months
   E. A worker who is unproductive


4. If there were a large labor productivity increase,
   what would be the effect on GDP and the price
   level?
   A. An increase in GDP, an increase in the price
   level
   B. An increase in GDP, a decrease in the price
   level
   C. No effect on GDP, an increase in the price
   level
   D. A decrease in GDP, an increase in the price
   level
   E. A decrease in GDP, a decrease in the price
   level


5. Which of the following could be attributed to an
   increase in the spending multiplier?
   A. An increase in the supply of money
   B. An increase in GDP
   C. An increase in personal income taxes
   D. An increase in the marginal propensity to
   consume
   E. An increase in the required reserve ratio


6. According to Keynesians, which of the following
   could be attributed to an increase in aggregate
   demand?
   A. An increase in investment
   B. An increase in interest rates
   C. A decrease in transfer payments
   D. A decrease in government expenditures
   E. A decrease in consumer spending