Economics Micro & Macro (CliffsAP)

53. What does point F represent?
    A. An unattainable point
    B. Underutilization
    C. Trade-offs
    D. Opportunity cost
    E. Where firms can produce most efficiently


54. What does a production possibilities curve
    illustrate?
    A. The relationship between price and quantity
    demanded
    B. The relationship between price and quantity
    supplied
    C. The various combinations of how resources
    can be applied efficiently
    D. The various combinations of how supply and
    demand can be applied efficiently
    E. The various combinations of unemployment
    and inflation


55. through 57. Questions 55 through 57 refer to the
    following graph.


56. In what range is full employment located on the
    graph above?
    A. Range 1
    B. Range 2
    C. Range 3
    D. Ranges 1 and 2
    E. Ranges 2 and 3
    56. According to aggregate demand on the graph,
    what is the economy experiencing?
    A. Low unemployment
    B. High inflation
    C. High unemployment
    D. High levels of government spending
    E. High levels of growth


57. According to Keynesians, what fiscal policy would
    help aggregate demand shift into full
    employment?
    A. Increased taxes and decreased spending
    B. Decreased interest rates
    C. Increased interest rates and decreased
    spending
    D. Increased spending and decreased taxes
    E. Decreased reserve requirement
    58. An increase of which of the following is likely to
    help the long-run growth rate in the economy?
    A. Population
    B. GDP
    C. Education for the public
    D. The supply of goods and services
    E. Interest rates
    59. What effect will an increase in the money supply
    have on the economy?
    A. It will cause interest rates to rise.
    B. It will increase the amount of money banks
    hold in primary reserves.
    C. It will decrease interest rates.
    D. It will decrease unemployment.
    E. It will increase unemployment.
    60. If the economy were experiencing high levels of
    inflation, which of the following would be proper
    monetary policy?
    A. Lowering interest rates
    B. Increasing interest rates
    C. Decreasing the reserve requirement
    D. Selling open-market securities
    E. Raising taxes

Real GDP

Range 1

Range 2

Range 3

AD

AS

Price

Level

Part IV: AP Macroeconomics & Microeconomics Tests