AP Macroeconomics FRQ Room

Aggregate Demand and Supply Analysis

This question examines the aggregate demand (AD) and aggregate supply (AS) framework. Use diagrams a

Analyzing Trade-offs and Decision Making in Firms

A firm must make production decisions that involve trade-offs. Use the following scenario and data t

Capital Flows and International Investment Decisions

This question analyzes how changes in domestic interest rates influence capital flows and the subseq

Comparative Advantage and Gains from Trade

This question explores the concepts of absolute and comparative advantage, and how specialization an

Comparative Advantage and Trade

Two countries, Country A and Country B, produce wine and cheese. Use the production data provided to

Comparative Advantage in International Trade: Calculation and Application

This question focuses on applying the concept of comparative advantage to determine gains from trade

Determinants of Supply and Shifting Curves

This question focuses on understanding the determinants of supply and the difference between movemen

Economic Decision-Making in Business: Balancing Costs and Benefits

Evaluate a firm's investment decisions by analyzing opportunity costs and net benefits.

Economic Growth and Efficiency

This question focuses on the relationship between economic growth, technological advancements, and e

Economic Growth and Shifts in LRAS

Analyze how technological improvements can lead to economic growth, using the AD-AS framework to ill

Economic Growth and Shifts in the Production Possibilities Frontier

This question examines the concept of economic growth and how it is represented by shifts in the Pro

Firm Production Decisions: Trade-Off and Input Choices

Analyze the trade-offs a firm faces when choosing between different production methods with varying

FRQ 4: Market Equilibrium and Supply Shock Analysis

Analyze the impact of a supply shock on market equilibrium by applying supply and demand concepts us

FRQ 14: Consumer Preferences and Market Equilibrium

Assess how changes in consumer tastes affect demand and market equilibrium, using graphical analysis

FRQ 17: Impact of a Supply Shock on Aggregate Output and Prices

Apply aggregate demand and aggregate supply analysis to evaluate the short-run and long-run effects

Government Policies and Market Equilibrium

This question examines how government policies, such as taxes, affect market equilibrium and overall

Impact of Price Controls on Market Equilibrium

This question addresses the effects of price controls on market outcomes. Answer the following parts

Inflation and the Phillips Curve

Analyze the relationship between inflation and unemployment using the Phillips Curve, especially in

Loanable Funds Market and Investment

Analyze the loanable funds market to understand the interaction between savers and borrowers. Comple

Market Equilibrium and Disequilibrium Analysis

This question explores how market equilibrium is determined and what happens when the market is not

Micro vs. Macroeconomic Analysis: Policy Impacts

Differentiate between microeconomic and macroeconomic perspectives and examine how policy changes su

Natural Resources Scarcity and Economic Decisions

This question examines how the scarcity of natural resources influences production decisions and tra

Opportunity Cost in Consumer Decision-Making

This question focuses on understanding opportunity cost in the context of everyday consumer decision

Opportunity Cost on the Production Possibility Frontier

Analyze opportunity cost by examining movements along a Production Possibility Curve (PPC).

PPC and Economic Growth

In this question, you will analyze an economy's production possibilities and explore the concept of

PPC and Opportunity Cost Analysis

Using the Production Possibilities Curve (PPC), analyze opportunity costs in an economy that produce

Price Ceiling Impacts in the Housing Market

This question examines the impact of government-imposed price ceilings on market outcomes. Consider

Price Floor Effects in Agricultural Markets

This question focuses on the impact of a government-imposed price floor on market outcomes, using th

Production Possibilities Curve (PPC) Analysis

This question examines the use of the Production Possibilities Curve to illustrate opportunity costs

Production Possibilities Curve Analysis

This question focuses on the Production Possibilities Curve (PPC) and its implications for opportuni

Scarcity and Opportunity Costs

This FRQ addresses basic concepts of scarcity and opportunity cost. Answer the following parts:

Scarcity and Prioritization in Public Policy

This question examines how scarcity influences government spending decisions and the trade-offs that

Scarcity and Resource Allocation in Decision-Making

This question examines the concept of scarcity and how it forces both individuals and governments to

Short-Run vs Long-Run Adjustments: Aggregate Supply

Discuss the effects of sticky wages on the aggregate supply in the short run versus the long run. An

Supply Determinants and Shifts

This question examines the determinants of supply and how they cause shifts in the supply curve. Ans

Supply Shifters and Producer Surplus

Analyze the concept of producer surplus and the impact of supply shifters on it. Provide a diagram a

Supply Shock and AD-AS Model

A sudden spike in oil prices leads to a negative supply shock in the economy. Analyze the effects of

Technology and Supply: Effects on Equilibrium

Investigate the role of technological innovation in reducing production costs and altering market eq

Trade-offs and Budget Constraints

Analyze the relationship between scarcity, trade-offs, and budget constraints. Use numerical example

Understanding Ceteris Paribus in Demand Analysis

Ceteris paribus ("all else equal") is a key assumption in economics when analyzing the demand for a

Understanding Market Disequilibrium: Surpluses and Shortages

This question explores market disequilibrium through the analysis of surpluses and shortages using p

Unemployment, Inflation, and the Phillips Curve

Analyze the relationship between inflation and unemployment using the Phillips Curve framework. Answ

Aggregate Income and National Income

National income can be calculated from both the aggregate income approach and the aggregate spending

Analyzing Different Types of Unemployment

Differentiate between frictional, structural, and cyclical unemployment. Analyze which type is most

Business Cycles: Identification and Analysis

This question asks you to identify and analyze the phases of the business cycle, including interpret

Calculating Real GDP Growth and Economic Performance

Using the relationship $$\%\,\Delta\,\text{Real GDP} = \%\,\Delta\,\text{Nominal GDP} - \%\,\Delta\,

Circular Flow in a Closed Economy

Analyze the basic circular flow model in a closed economy and explain the effects of including addit

Circular Flow Model and GDP Calculation

This question asks you to analyze the circular flow model and calculate GDP using the expenditure ap

Circular Flow with the Government Sector

Macroeconomic models often expand the basic circular flow to include the government and foreign sect

Comprehensive Business Cycle Analysis

Analyze a complex business cycle graph and propose policy recommendations based on cyclical changes.

Consumer Behavior and the CPI Market Basket

This question focuses on how changes in consumer behavior and technological advancements affect the

Consumer Price Index (CPI) and Inflation

Evaluate the role of the Consumer Price Index (CPI) in measuring inflation and analyze its impact on

Cost of Inflation: Menu and Shoe-Leather Costs

This question asks you to define and differentiate between menu costs and shoe-leather costs associa

CPI and Inflation Calculation Problem

This question examines your ability to compute the inflation rate using CPI data and helps you analy

CPI Calculation and its Limitations

This question examines the calculation of inflation through CPI and explores biases and limitations

CPI Methodology Critique: Substitution Bias and Quality Adjustments

Critically evaluate the methodology behind the Consumer Price Index (CPI), with a focus on substitut

Effects of Unexpected Inflation on Economic Agents

Unexpected inflation can have varied effects on different groups in the economy. Answer the followin

Evaluating the Limitations of GDP as a Measure of Economic Welfare

Critically assess GDP as an indicator of economic welfare by discussing its limitations and suggesti

Expanding the Circular Flow Model: Introducing the Foreign Sector

This question extends your understanding of the circular flow model by incorporating the foreign sec

Extended Circular Flow Model with Government and Foreign Trade

Expand upon the basic circular flow model to include the government and foreign sectors.

Fiscal Policy and Real GDP: A Multiplier Analysis

This question requires you to explain the fiscal multiplier concept, perform a calculation using giv

GDP Calculation Using the Value-Added Approach

Analyze a production chain and compute GDP using the value-added approach. Then, compare this method

GDP Deflator and Price Indices

This question requires you to define the GDP deflator, perform a calculation, and analyze its limita

GDP Deflator versus CPI Comparison

Explain the differences between the Consumer Price Index (CPI) and the GDP Deflator in measuring inf

GDP, National Income, and the Value-Added Approach

This question examines students' understanding of different methods of calculating GDP, with a focus

Impact of Inflation Expectations on Interest Rates

Assess the role of inflation expectations in determining nominal interest rates and discuss the impl

Incorporating the Foreign Sector in Circular Flow

Analyze the extended circular flow model by incorporating the foreign sector and its impact on GDP.

Labor Force Participation and Economic Analysis

Using provided data, calculate the labor force participation rate (LFPR) and analyze its significanc

Limitations of GDP as an Economic Indicator

GDP is widely used to gauge economic performance, but it has several limitations. Answer the followi

Real Income and Purchasing Power

Discuss the distinctions between nominal income and real income, and analyze how changes in the Cons

Real Income and Purchasing Power Analysis

Evaluate the impact of inflation on real income and, by extension, on purchasing power using the pro

Real vs Nominal GDP Computation

Calculate real GDP from given nominal GDP and the price index, and discuss the significance of real

Real vs. Nominal GDP

Compare and contrast nominal GDP and real GDP. Calculate real GDP from given data and discuss the im

Short-run vs. Long-run Effects on Unemployment

This question requires you to analyze unemployment within the labor market, using diagrams and a dis

Understanding Components of GDP

This question focuses on breaking down the components of the GDP equation. You will identify each co

Unemployment Measurement and Calculation

Using provided employment data, calculate the official unemployment rate and discuss potential pitfa

AD-AS Equilibrium and the Impact of Market Expectations

This question investigates how market expectations, particularly regarding inflation, can affect the

Aggregate Supply Adjustments in Response to Labor Market Changes

Assess how changes in labor market conditions, such as a significant wage increase, affect the short

Automatic Stabilizers and Economic Fluctuations

This question assesses your understanding of automatic stabilizers and how these built-in fiscal mec

Automatic Stabilizers and Their Impacts on Economic Fluctuations

This question focuses on the role of automatic stabilizers in mitigating economic fluctuations durin

Automatic Stabilizers: Their Role and Impact

Examine the concept of automatic stabilizers in fiscal policy. Discuss how they operate during econo

Comparative Analysis of Expansionary and Contractionary Fiscal Policy

Discuss the differences between expansionary and contractionary fiscal policy and analyze their resp

Contractionary Fiscal Policy and Its Economic Impact

This question focuses on contractionary fiscal policy and its role in cooling an overheated economy.

Credit Crunch and AD Analysis

A sudden tightening in credit markets, commonly known as a credit crunch, affects borrowing and spen

Discretionary vs. Non-Discretionary Fiscal Policies

Analyze the differences between discretionary and non-discretionary fiscal policies. Discuss their r

Dynamic Effects of Fiscal Policy on the AD Multiplier

Analyze the dynamic effects of expansionary fiscal policy in the context of the spending multiplier.

Effects of Exchange Rates on Net Exports

Analyze the relationship between exchange rates and net exports, and assess how fiscal policy can in

Evaluating Policy Trade-offs: Spending vs. Tax Cuts in Stimulus Packages

This question evaluates the trade-offs between using government spending and tax cuts as tools to st

Fiscal Policy Expansion versus Contraction

Discuss the differing impacts of expansionary versus contractionary fiscal policy on aggregate deman

Fiscal Policy Lags and Economic Stabilization

This question examines the concept of fiscal policy lags and their impact on the effectiveness of go

Fiscal Stimulus and Unintended Consequences in an Overheated Economy

Debate the potential unintended consequences of implementing expansionary fiscal policy in an econom

FRQ 2: Spending Multiplier Analysis

Analyze the concept of the spending multiplier in the macroeconomy and determine its numerical value

FRQ 6: Long-Run Aggregate Supply and Economic Growth

This question focuses on the long-run aggregate supply (LRAS) and the determinants of economic growt

FRQ 7: Fiscal Policy: Expansionary vs Contractionary

Discuss how fiscal policy can be used to address different types of macroeconomic imbalances in the

FRQ 10: Globalization and the Foreign Sector Substitution Effect

Analyze how globalization and the foreign sector substitution effect can influence domestic aggregat

FRQ 13: Aggregate Demand Curve Diagram and Shifts

Illustrate the aggregate demand (AD) curve and explain the factors that can shift it.

FRQ 16: Globalization and Net Exports

Globalization influences the net exports component of aggregate demand. Part A: Explain how fluctua

FRQ 18: Policy Interventions during Inflation: A Fiscal Perspective

Discuss the fiscal policy interventions that can be used to address an inflationary gap, including p

GDP Equilibrium in the AD-AS Model: Recessionary Gap and Self-Correction

This question examines the concept of macroeconomic equilibrium in the AD-AS model, particularly in

Government Spending Efficacy in Addressing Recessionary Gaps

Evaluate the effectiveness and potential risks of using expansionary fiscal policy, specifically inc

Government Spending Injection and the Multiplier Effect

This question explores the effect of an injection of government spending on real GDP through the mul

Impact of Inflation on Various Economic Agents

In this problem, you will analyze a scenario with rising inflation and its effects on different part

Interest Rate and Wealth Effects in AD

Examine the roles of the interest rate effect and the wealth effect in shaping the aggregate demand

Interplay Between Nominal and Real GDP in the AD-AS Framework

Discuss the differences between nominal and real GDP and how changes in the aggregate price level af

Loanable Funds Market and Interest Rates: Government Borrowing Impact

This question explores the effects of increased government borrowing on the loanable funds market an

Long-Run Self-Adjustment in a Recessionary Gap

An economy experiences a recessionary gap without any active fiscal or monetary intervention. Over t

Monetary Policy and Aggregate Demand

Analyze the effects of an expansionary monetary policy on aggregate demand through the interest rate

Negative Consumer Spending Shock and Policy Responses

Consider an economy initially in equilibrium under the AD-AS framework. Suddenly, due to a significa

Negative Supply Shock: Effects on Equilibrium

Consider an economy that experiences a negative supply shock due to a sudden increase in energy pric

Policy Responses to Negative Supply Shocks

Negative supply shocks can disrupt economic stability. Answer the following: (a) Define a negative

Short-Run Aggregate Supply (SRAS) Shocks

Examine how negative supply shocks affect the short-run aggregate supply curve and the overall econo

Short-Run Aggregate Supply Shocks and Economic Outcomes

This question assesses your understanding of how fluctuations in input prices affect Short-Run Aggre

Short-Run vs. Long-Run Aggregate Supply

This question examines the differences between short-run and long-run aggregate supply. (a) Differe

Spending and Tax Multipliers in Stimulating GDP

This question examines the application of spending and tax multipliers to predict changes in GDP fol

Spending and Tax Multipliers: Calculations and Analysis

This question tests your ability to calculate and interpret the spending multiplier and tax multipli

Supply Shocks and Short-Run Adjustments in SRAS

This question examines the impact of supply shocks on the short-run aggregate supply (SRAS) curve an

Supply Shocks and Short-Run Aggregate Supply

This question explores the impact of supply shocks on the short-run aggregate supply (SRAS). (a) De

Supply Shocks and Short-Run Aggregate Supply

Analyze the role of supply shocks in shifting the short-run aggregate supply (SRAS) and their effect

Tax and Spending Multipliers in Fiscal Policy

This question focuses on a detailed analysis of tax and spending multipliers and their roles in fisc

Wage-Setting Behavior and Shifts in SRAS

Analyze how inflation expectations influence wage-setting behavior and subsequently shift the short-

Analyzing Negative Real Interest Rates and the Housing Market

Negative real interest rates can have significant effects on the housing market. Answer the followin

Analyzing the Price-Yield Relationship in Bond Markets

This question explores why bond prices and interest rates are inversely related. Answer the followin

Bond Pricing and the Inverse Relationship with Interest Rates

Bond prices and interest rates share an inverse relationship. Answer the following: (i) Explain why

Calculating Real vs. Nominal Interest Rates

Interest rates can be expressed in nominal and real terms. Use the following equations: $$\text{Nomi

Comparing Equity vs Debt Financing: Stocks vs Bonds

This question explores the differences between equity financing (stocks) and debt financing (bonds).

Contractionary Monetary Policy and Economic Stabilization

Analyze the role and impacts of contractionary monetary policy in stabilizing the economy. Answer th

Discount Rate and Reserve Requirement Adjustments

Changes in the discount rate and reserve requirements can significantly affect bank lending and the

Equity vs. Debt Financing: Analysis Using Financial Data

A company is evaluating its financing options and is considering both equity financing (issuing stoc

Evaluating Investment Choices: Rate of Return Analysis

A firm is evaluating two potential investments: a physical asset and a financial asset. The firm req

Evaluating the Effects of Contractionary Monetary Policy

This question examines the effects of contractionary monetary policy on the money market and the bro

Evaluating the Measures of Money Supply: M1 vs. M2

M1 and M2 are two key measures of the money supply. Answer the following questions based on the defi

Expansionary vs. Contractionary Monetary Policy

Discuss the differences between expansionary and contractionary monetary policies and their effects

Exploring the Relationship between Monetary Base and Money Supply

The monetary base and the money supply are closely linked through the banking system. Analyze the fo

Financial Asset Evaluation: Expected Return and Risk

A firm is considering an investment in a stock that has an expected rate of return of 8%. The firm’s

Financial Assets and the Risk-Return Tradeoff

This question examines the risk-return tradeoff in financial investments. Answer the following parts

Fractional Reserve Banking and the Money Multiplier

This question addresses fractional reserve banking, the money multiplier, and bank T-account analysi

Fractional Reserve Banking and the Money Multiplier

This question addresses the principles of fractional reserve banking and the concept of the money mu

Fractional Reserve Banking and the Money Multiplier

Consider the process of fractional reserve banking and its effect on the money supply. Answer the fo

Fractional Reserve Banking and the Money Multiplier

Discuss how the fractional reserve banking system expands the money supply via the money multiplier

FRQ 1: Evaluating Investment Decisions Based on Expected Rate of Return

Using the provided table of assets, analyze which asset meets the firm's criterion for a physical as

FRQ 4: Real vs Nominal Interest Rates Calculation

Utilize given scenarios to compute real interest rates and analyze their implications for economic a

FRQ 9: Expansionary Monetary Policy via Open Market Operations

Evaluate the impact of an open market purchase on the money supply and interest rates.

FRQ 16: Functions and Evolution of Money

Discuss the functions of money and its evolution from commodity money to fiat money.

Graphical Representation of the Money Market

This question requires you to graphically represent the money market and analyze the impact of a dec

Impact of Changes in Required Reserve Ratios on Banking and Money Supply

Changes in the required reserve ratio can have significant effects on the money creation process. An

Inflationary Expectations and Financial Asset Valuation

This question analyzes how inflationary expectations affect the valuation of financial assets and th

Liquidity and Investment Choices

This question investigates how liquidity considerations affect an investor’s choice among different

Loanable Funds Market and Government Deficit Spending

This question explores how an increase in government deficit spending affects the loanable funds mar

Loanable Funds Market Dynamics

Examine the loanable funds market in terms of supply and demand and discuss the effects of fiscal po

Loanable Funds Market: Impact of Government Deficits

Government fiscal policies, especially deficit spending, can influence the loanable funds market. Co

Measurement of the Money Supply

Examine the definitions of M1 and M2 and discuss why the money supply is considered fixed at a given

Monetary Base versus Money Supply

Analyze the differences between the monetary base and the broader money supply. Answer the following

Monetary Policy Transmission Through the AD-AS Model

Examine the effects of expansionary monetary policy on the economy using the AD-AS framework, includ

Money and Liquidity: Functions and Classification

Money serves several crucial roles in the economy. Describe its functions and explain why liquidity

Money Creation through Bank Lending Process

Explain how money is created in a fractional reserve banking system through the process of bank lend

Money Market Equilibrium and Monetary Policy Impact

This question examines money market equilibrium and the effect of expansionary monetary policy on in

Money Supply: M1 and M2 Definitions and Calculations

Answer the following questions related to money supply definitions: (i) Define M1 and M2 and descri

Nominal vs Real Interest Rates: Impact Analysis

An economy has experienced varying levels of inflation and nominal interest rates over three recent

Nominal vs. Real Interest Rates in Investment Decisions

Examine the impact of nominal and real interest rates on economic decision–making. Answer the follow

Real Rates and Inflation Impact on Returns

Investors need to consider the real rate of return when evaluating investments. Answer the following

Required Reserve Ratio and the Money Multiplier

This question explores the impact of changes in the required reserve ratio on the money multiplier a

Risk in Investment Decisions

This question examines how risk is defined in financial investments and how changes in economic cond

Stock vs. Bonds: Investment Decision Making

A firm is considering raising funds through equity (by issuing stocks) or debt (by issuing bonds). A

The Discount Rate and Its Economic Impact

Examine the role of the discount rate as a monetary policy tool and its broader economic implication

The Impact of the Required Reserve Ratio on Money Creation

This question investigates how variations in the required reserve ratio influence the money multipli

Transaction Demand vs. Asset Demand for Money

Examine the two components of money demand: transaction demand and asset demand. Answer the followin

AD‐AS Analysis of Recessionary Gap Adjustment

Consider an economy that is operating below its full-employment level. In this question, you will us

Aggregate Price Measures and Inflation Calculation

This question assesses your ability to compute and interpret nominal GDP, the GDP deflator, and the

Aggregate Production Function and Long-run Growth

The aggregate production function relates inputs like capital and labor to total output. Examine how

Analyzing Double Shocks: Recession and Inflation Simultaneously

An economy is hit by two simultaneous shocks: a decline in aggregate demand due to reduced consumer

Analyzing Policy Shifts: Expansionary Monetary vs. Contractionary Fiscal Policy

Compare the economic impacts of expansionary monetary policy and contractionary fiscal policy. Discu

Analyzing the Crowding Out Effect

Government borrowing to finance deficits can lead to a reduction in private investment through the c

Analyzing the Wage-Price Spiral

An economy is experiencing a wage-price spiral where rising wages lead to higher production costs, w

Balancing Unemployment and Inflation: Policy Trade-offs and the Phillips Curve

Utilize the Phillips curve framework to analyze the trade-offs between unemployment and inflation, a

Comparing Expansionary Monetary and Fiscal Policies

Compare the short-run and long-run effects of expansionary monetary policy versus expansionary fisca

Comparing Price Index Measures: GDP Deflator vs CPI

Using provided data, compute the GDP deflator and the Consumer Price Index (CPI), and compare the ad

Contractionary Fiscal Policy to Correct an Inflationary Gap

Suppose the economy is operating above its full-employment level, creating an inflationary gap. The

Coordination of Fiscal and Monetary Policies during Deep Recession

An economy in a deep recession faces high unemployment and underutilized capacity. Analyze how a coo

Crowding Out in the Loanable Funds Market

The government increases its spending and finances it through borrowing, thereby increasing the dema

Deflationary Pressures and the Role of Fiscal Policy

An economy is experiencing deflation due to a decrease in aggregate demand and a contraction in the

Demand-Pull vs. Cost-Push Inflation Analysis

Differentiate between demand-pull inflation and cost-push inflation and examine how each affects the

Effects of Expansionary Monetary Policy in the Money Market

Consider an economy where the central bank decides to increase the money supply. In this scenario, t

Evaluating Public Policy Initiatives in Economic Growth

Critically assess the impact of public policy initiatives such as increased education and infrastruc

Evaluating the Impact of Infrastructure Spending on Long-Run Growth

The government launches a major infrastructure spending program aimed at improving transportation ne

Fiscal Deficit, National Debt, and Long-Run Growth

Examine the long-run implications of persistent fiscal deficits and a high national debt on economic

Fiscal Policy Coordination and Its Trade-offs

This question explores the coordination of fiscal and monetary policies and the trade-offs involved.

Fiscal Stimulus and Short-Run Aggregate Demand

Evaluate the impact of fiscal stimulus on aggregate demand (AD) and discuss the short-run trade-offs

FRQ 3: Coordination of Fiscal and Monetary Policies in Deep Recession

Evaluate how coordinated fiscal and monetary policies can be used in a deep recession to restore ful

FRQ 4: Phillips Curve Analysis – Inflation and Unemployment Trade-offs

Assess the relationship between inflation and unemployment using the Phillips curve framework. Your

FRQ 4: Phillips Curve Analysis – Short-Run vs. Long-Run

Examine the Phillips curve and discuss how the short-run trade-off between inflation and unemploymen

FRQ 5: Monetary Neutrality and the Quantity Theory of Money

Discuss the concept of monetary neutrality using the quantity theory of money. Answer the following

FRQ 5: Money Growth and Inflation – The Quantity Theory of Money

Using the quantity theory of money, analyze how changes in the money supply affect the price level.

FRQ 6: Cost-Push Inflation and the Wage-Price Spiral Dynamics

Analyze the phenomena of cost-push inflation and the wage-price spiral. Use a graphical representati

FRQ 6: Supply-Side Fiscal Policy and Long-Run Economic Growth

Evaluate how supply-side fiscal policies promote long-run economic growth by shifting the long-run a

FRQ 10: Monetary Policy Effects on the Money Market

Analyze how expansionary monetary policy impacts the money market and, subsequently, the broader eco

FRQ 13: Aggregate Production Function and Productivity Shifts

Explain how shifts in the aggregate production function can lead to improvements in productivity and

FRQ 14: Policy Coordination in a Changing Economic Environment

Analyze how fiscal and monetary policies can be coordinated to achieve both full employment and stab

FRQ 17: Risk Behavior, Interest Rates, and Investment Incentives

Discuss how changes in tax policy can influence risk-taking and investment incentives. Analyze the p

FRQ 19: Public Policy and Infrastructure Spending – Effects on AD and LRAS

Examine how government spending on infrastructure can affect both aggregate demand and long-run aggr

Impact of Contractionary Monetary Policy on AD and Inflation

In an economy experiencing rising inflation, the central bank decides to contract the money supply.

Inflationary Gap Correction via Contractionary Policies

When an economy operates above full employment (an inflationary gap), policymakers may use contracti

Long-run Impact of Infrastructure Investment on Growth

A government has decided to increase spending on infrastructure projects. Answer the following: (a)

Long-Run Monetary Neutrality: Theory and Evidence

Discuss the theory of monetary neutrality and analyze its implications for long-run economic growth.

Monetary Neutrality and Real GDP

Monetary neutrality suggests that changes in the money supply affect nominal variables but not real

Monetary Neutrality in the Long Run

The concept of monetary neutrality holds that changes in the money supply do not affect real variabl

Monetary Policy for Recessionary Gap Correction

An economy experiencing a recessionary gap sees the central bank increase the money supply by 20% to

Monetary Policy: Impact on Money Supply and Inflation

Consider an economy in which the central bank implements an expansionary monetary policy by increasi

Money Growth and the Quantity Theory of Money

This question challenges you to explore the relationship between money supply, nominal GDP, and the

Phillips Curve Analysis: Short-Run Trade-off vs. Long-Run Neutrality

The Phillips curve illustrates the short-run trade-off between inflation and unemployment, but this

Phillips Curve Analysis: Short-run vs Long-run Implications

Consider an economy experiencing demand-pull inflation. (a) Define the short-run Phillips Curve (SR

Phillips Curve: Trade-offs and Long-run Neutrality

The Phillips curve illustrates the trade-off between inflation and unemployment in the short run but

Public Debt, Interest Rates, and Private Investment: Exploring Crowding Out

High levels of public debt can have various impacts on the economy. Answer the following: (a) Descr

Quantity Theory of Money and Inflation

Discuss the Quantity Theory of Money and demonstrate how changes in the money supply can lead to inf

Supply-Side Fiscal Policy and Tax Incentives

Analyze the role of supply-side fiscal policy, particularly through tax incentives, in stimulating e

Supply-Side Policies and Long-run Aggregate Supply Shifts

Supply-side policies aim to improve the productive capacity of the economy. Answer the following: (

Supply-Side Policies and Productivity Improvements

A country implements various supply-side policies focused on technological innovation and human capi

Analyzing Net Export Changes Using Data

Analyze how fluctuations in the currency value influence net exports using the data provided in the

Analyzing the U.S. Balance of Payments Account Deficit

This FRQ examines the components of the balance of payments accounts. The U.S. is experiencing a cur

Balance of Payments Accounts Analysis

This question assesses your understanding of the components of the balance-of-payments statement. In

Balance of Payments and Exchange Rate Dynamics: A Case Study

Based on the provided balance of payments table, analyze the drivers of the BOP imbalance and the re

Central Bank Policy and Exchange Rate Dynamics

Analyze how contractionary monetary policy affects domestic interest rates and the exchange rate in

Comparing Quotas and Tariffs in Domestic Markets

Evaluate the impact of import quotas versus protective tariffs on domestic markets.

Comparing Tariffs and Quotas

The table below compares the effects of tariffs and import quotas on the domestic market for a given

Currency Appreciation and Net Exports

Explore the relationship between currency appreciation and net exports. Address the following parts:

Currency Depreciation and Outbound Capital Flows

Discuss how a depreciated domestic currency influences outbound capital flows and suggest policy mea

Domestic Policy and International Financial Markets

Analyze how domestic fiscal and monetary policies interact with international financial markets to i

Exchange Rate Determination in Currency Markets

Examine the fundamentals of exchange rate determination in international markets. Answer the parts t

Exchange Rate Equilibrium Analysis

Referring to the provided foreign exchange market graph, answer the following parts regarding equili

Exchange Rate Impact on Net Exports

Discuss the impact of a depreciating domestic currency on net exports using the information from the

Exchange Rate Implications for Multinational Investment Decisions

Examine how exchange rate fluctuations impact multinational investment decisions and assess how thes

Fed Intervention in Balance-of-Payments Adjustment

Analyze the role of the Federal Reserve in intervening in the foreign exchange market to correct bal

Fiscal Policy Effects on Exchange Rates

Analyze how fiscal policy can influence the exchange rate and aggregate demand. Your answer should c

Floating Exchange Rates and Domestic Economic Policy

Discuss the advantages and disadvantages of a floating exchange rate system with respect to domestic

Foreign Exchange Market Equilibrium and Money Supply Shifts

Examine the impact of monetary policy changes on the foreign exchange market.

FRQ 3: Balance of Payments – Current and Capital Account Dynamics

Examine the balance of payments accounts by differentiating between the current account and the capi

FRQ 4: The Role of Speculation in the Forex Market

Speculation in the forex market can create rapid fluctuations in exchange rates. This question focus

FRQ 15: Monetary Contraction – Effects on International Trade and Production

Contractionary monetary policy, which reduces the money supply, can have far-reaching effects on bot

FRQ 18: Supply and Demand Shifts in the Foreign Exchange Market

This question focuses on the simultaneous shifts in the supply and demand for a currency in the FX m

Impact of Fiscal Policy on Aggregate Demand and Net Exports

This FRQ explores how expansionary fiscal policy affects aggregate demand and subsequently influence

Impact of Relative Incomes on Currency Demand

Analyze how differences in relative incomes between countries can influence currency demand and exch

Impact of Tariffs on the Domestic Steel Market

Analyze the effects of imposing a protective tariff on imported steel.

Monetary Policy and International Asset Flows

Discuss how expansionary monetary policy impacts domestic interest rates and subsequently influences

Monetary Policy's Influence on the Money Market and Exchange Rates

Evaluate the impact of an expansionary monetary policy on domestic interest rates and the foreign ex

Policy Evaluation: Tariffs, Quotas, and Trade Wars

Compare two different trade barrier tools—tariffs and quotas—and analyze their potential to trigger

Real Effects of Exchange Rate Movements on Net Exports

Examine the impact of currency appreciation on a nation's net exports and overall aggregate demand.

Real Interest Rates and Investment Flow Dynamics

Consider the functional relationship given by the equation: $$Investment\,Flow = 50 * (Real\,Interes

Relative Income and Exchange Rate Dynamics

National income differences can alter currency values. Explain how rising incomes in a foreign count

Speculation Effects on Currency Valuation

Discuss the role of speculation in the foreign exchange market and how it can lead to rapid changes

Tariff Impacts on Domestic Markets

A protective tariff is imposed on imported steel. The following graph displays the domestic supply a

Trade Policies and Aggregate Demand

Examine how trade policies such as tariffs affect aggregate demand. Provide a detailed response addr