5 Steps to a 5 AP Macroeconomics 2019

AP Macroeconomics Practice Exam 2 ❮ 201

ADULT UN-
YEAR POPULATION EMPLOYED EMPLOYED

2003 1000 600 200
2004 1200 800 200

14. The table above summarizes the local labor
    market. Based on this information, which of the
    following is an accurate statement?
    (A) The number of discouraged workers has
    fallen from 2003 to 2004.
    (B) Although the population has grown, the
    labor force has remained constant from
    2003 to 2004.
    (C) The unemployment rate fell from 33 percent
    in 2003 to 25 percent in 2004.
    (D) The economic recession in 2003 worsened
    in 2004.
    (E) The unemployment rate fell from 25 percent
    in 2003 to 20 percent in 2004.


15. Which of the following is true of money and
    financial markets?
    (A) As the demand for bonds increases, the
    interest rate increases.
    (B) For a given money supply, if nominal GDP
    increases, the velocity of money decreases.
    (C) When demand for stocks and bonds
    increases, the asset demand for money falls.
    (D) A macroeconomic recession increases the
    demand for loanable funds.
    (E) Equilibrium in the money market occurs
    where the transaction demand for money
    equals the supply of money.


16. Which of the following would increase the aggre-
    gate demand function?
    (A) Higher levels of imported goods
    (B) Lower levels of consumer wealth
    (C) A higher real interest rate
    (D) Lower taxes on personal income
    (E) Lower levels of exported goods
    17. The figure above shows aggregate demand (AD)
    and supply (AS) for the economy. Assuming
    that aggregate demand remains constant, which
    of the following best predicts the short-run
    price level, the long-run price level, and the
    long-run level of output?

SHORT-RUN LONG-RUN LONG-RUN

PRICE LEVEL PRICE LEVEL OUTPUT

(A) P 2 P 1 Q 4

(B) P 2 P 2 Q 1

(C) P 2 P 3 Q 1

(D) P 1 P 2 Q 3

(E) P 3 P 2 Q 2

18. Which of the following is not included in the
    U.S. GDP?
    (A) The U.S. military opens a new base in a
    foreign country with 1,000 U.S. personnel.
    (B) Japanese consumers buy thousands of CDs
    produced in the United States.
    (C) An American pop singer performs a sold-
    out concert in Paris.
    (D) A French theatrical production tours dozens
    of American cities.
    (E) American construction companies build
    thousands of new homes all across the
    United States and Canada.


19. A policy supported by supply-side economists
    would be
    (A) higher taxes on corporate profits.
    (B) lower tax rates on interest earned from savings.
    (C) removal of investment tax credits.
    (D) a longer duration of unemployment ben-
    efits.
    (E) higher marginal income tax rates to fund
    social welfare programs.

real GDP

long-run AS

short-run AS

AD

Price level

P 1

P 2

P 3

Q 1 Q 2 Q 3 Q 4