AP Macroeconomics FRQ Room

AD-AS Analysis of a Decrease in Consumer Spending

Analyze the macroeconomic effects of a 10% decline in consumer spending using the aggregate demand–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

Calculating Opportunity Cost in Resource Allocation

This question asks you to compute opportunity cost in a given resource allocation scenario and to an

Comparative Advantage and Gains from Trade

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

Comparative Advantage and Trade

This question tests your ability to analyze the concepts of absolute and comparative advantage and t

Comparative Advantage in International Trade: Calculation and Application

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

Comprehensive Review of Basic Economic Concepts

This comprehensive question integrates multiple basic economic concepts including scarcity, opportun

Consumer Choice and Indifference Curves

Examine consumer choice theory by analyzing indifference curves and budget constraints. Use diagrams

Consumer Preferences and Demand Shifts

Analyze how changes in consumer income and tastes affect demand using a demand and supply framework.

Determinants of Supply and Shifting Curves

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

Distinguishing Macro and Microeconomic Perspectives

This question contrasts macroeconomics with microeconomics. Provide clear explanations and examples.

FRQ 1: Scarcity and Opportunity Costs

This question examines the concepts of scarcity and opportunity cost in everyday decision-making usi

FRQ 6: Supply Determinants and Market Response

Analyze how various determinants of supply influence market equilibrium using the provided table on

FRQ 7: Macro vs. Micro Economics in Decision-Making

Contrast macroeconomics and microeconomics by discussing how each perspective analyzes economic deci

FRQ 11: Government Trade-offs: Taxation vs. Public Investment

Evaluate the trade-offs governments face when allocating scarce resources between taxation and publi

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

FRQ 20: Strategic Resource Allocation in a Competitive Firm

A firm faces limited resources and must allocate them between producing Product A and Product B. Ana

Graphical Analysis of Demand Shifts

This question investigates how changes in consumer preferences affect market demand and equilibrium

Impact of Government Regulation on Supply and Costs

This question examines how government-imposed regulations, such as environmental policies, can affec

Impact of Rising Labor Costs on Supply

A widget manufacturing firm faces a significant increase in labor costs due to rising wages. This in

Inflation and the Phillips Curve

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

Inflation Dynamics and the AD-AS Model

Utilize the Aggregate Demand-Aggregate Supply (AD-AS) framework to analyze inflation dynamics in the

Input and Output Problems in International Trade

This question addresses international trade issues by analyzing input and output decisions based on

International Trade and Exchange Rates

Examine the role of comparative advantage in international trade and analyze the impact of exchange

Interpreting a Production Possibility Frontier (PPF)

Analyze a given Production Possibility Frontier (PPF) to determine economic efficiency and opportuni

Interpreting the PPC Slope and Opportunity Cost

The slope of a Production Possibilities Curve (PPC) is a measure of opportunity cost. Suppose a PPC

Long-run vs. Short-run Adjustments in Macroeconomics

This question requires you to compare short-run and long-run adjustments following an adverse econom

Market Equilibrium and Disequilibrium: Surplus and Shortage Analysis

Analyze how deviations from equilibrium create surpluses or shortages and how markets adjust to rest

Market Failure, Productive and Allocative Efficiency

Examine the concepts of productive and allocative efficiency, and analyze how market failures can le

Money Demand and Supply Analysis

Analyze the effects of an increase in money demand on the money market equilibrium. Consider the imp

Money Market Equilibrium and Interest Rates

Examine the money market and how changes in money demand or supply influence interest rates. Answer

Opportunity Cost and Trade-offs Analysis

This question explores the concept of opportunity cost and trade-offs in individual decision-making.

Opportunity Cost in Production Decisions for Firms

This question investigates how a firm makes production decisions by analyzing opportunity costs when

Opportunity Costs in Personal Financial Decisions

This question examines how individuals make decisions based on opportunity costs, particularly in th

Price Controls in a Competitive Market

Examine the impact of imposing a binding price ceiling on a competitive market. Analyze the conseque

Production Possibilities and Economic Efficiency

Examine the concept of production possibilities and efficiency. Answer each part using definitions,

Production Possibilities Curve (PPC) Analysis

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

Resource Reallocation and Efficiency on a PPC

Assess the implications of resource reallocation on efficiency using a production possibilities fram

Supply Analysis and Shifts

Analyze the determinants of supply and the impact of factors such as technology on the supply curve.

Technology and Supply: Market Response

In this question, analyze the impact of a technological breakthrough on the supply side of a market.

The Effects of Taxation on Supply and Market Outcomes

Explore the impact of an excise tax on the supply curve, and analyze how it affects market equilibri

The Role of Technology in Economic Development

This question examines how advancements in technology drive economic growth and affect opportunity c

Trade-Offs and Efficiency in Production

Analyze the production trade-offs faced by an economy when allocating resources between two goods an

Trade-Offs and Opportunity Costs in Decision-Making

This question examines the concept of trade-offs and opportunity cost in economic decision-making.

Understanding Market Disequilibrium: Surpluses and Shortages

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

Aggregate Income and National Income

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

Business Cycle Analysis

Using quarterly GDP growth rate data, analyze the phases of the business cycle in a hypothetical eco

Business Cycle Analysis: AD-AS Model

Interpret an AD-AS graph to demonstrate different phases of the business cycle and analyze changes i

Business Cycle Phases and Policy Implications

Analyze the phases of the business cycle and propose appropriate economic policies for each phase. U

Business Cycles and Economic Policy

This question requires you to describe the phases of the business cycle, analyze economic data indic

Circular Flow and Economic Activity

Use the circular flow model to explain how economic activity circulates in a closed economy and disc

Circular Flow Model and GDP Calculation

This question focuses on the basic circular flow diagram and GDP calculation in a closed economy.

Circular Flow with the Government Sector

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

Comparing Business Cycle Theories and Policies

Different theories exist to explain fluctuations in the business cycle. Answer the following questio

Comparing the CPI and GDP Deflator

Differentiate between the Consumer Price Index (CPI) and the GDP deflator, and use the GDP deflator

Consumer Price Index and Inflation Calculation

The Consumer Price Index (CPI) is a primary indicator of inflation. Answer the following: Part A: G

CPI Calculation and its Limitations

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

Effects of Unexpected Inflation on Economic Agents

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

Environmental Costs and GDP Limitations

Examine the limitations of GDP as a measure of economic welfare with a focus on environmental degrad

Evaluating Fiscal Stimulus in a Recession

In a recession, governments may increase spending to stimulate the economy. Using the AD-AS model, a

Extended Circular Flow with Government and Foreign Sector

Describe how integrating the government and foreign sectors expands the circular flow model. Analyze

Fiscal Policy and Economic Output

Examine the impact of an expansionary fiscal policy in closing a recessionary gap. Describe the poli

GDP and Income Inequality

This question examines the limitations of GDP as a measure of overall economic well-being, particula

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 Level Analysis

Apply the GDP deflator in calculating real GDP and discuss its advantages over the CPI as a measure

Impact of Government Spending on GDP

This question explores how changes in government spending affect GDP and discusses potential seconda

Inflation Targeting and Monetary Policy

This question requires you to discuss how central banks use inflation targeting as part of their mon

Investment and the Circular Flow

This question explores the role of investment within the circular flow model and its implications fo

Investment Spending and the Multiplier Effect

Analyze how investment spending influences GDP through the multiplier effect. Use the spending multi

Labor Force Participation Analysis

Examine how labor force participation is measured and the effects that discouraged workers can have

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

Limitations of Gross Domestic Product (GDP)

GDP is one of the most widely used measures of economic performance. However, it has several limitat

Measuring Unemployment and the Effects of Discouraged Workers

This question addresses the measurement of the unemployment rate, the role of discouraged workers, a

Measuring Unemployment Rates and Phillips Curve Analysis

Analyze unemployment measurement and the implications for macroeconomic policy. Calculate the unempl

Product Market Dynamics and GDP Fluctuations

This question explores how changes in the product market affect equilibrium outcomes and subsequentl

Real Income and Purchasing Power Analysis

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

Structural vs Frictional Unemployment Analysis

Outline the differences between structural and frictional unemployment in an economy.

Technological Change and Economic Productivity

This question analyzes how technological innovations impact aggregate productivity and examines thei

The Shadow Economy’s Impact on GDP

This question examines the role of unreported economic activities (shadow economy) and their implica

Types of Unemployment and Policy Responses

Analyze different types of unemployment and propose a policy to address structural unemployment.

Understanding Monetary Policy Through Money Market Graphs

Assume the central bank increases the money supply in the economy. Answer the following questions:

Unemployment and Discouraged Workers

Analyze how the presence of discouraged workers affects the official unemployment rate and the perce

Unemployment Measures and Labor Force Participation

Using the given data, calculate key labor market indicators and discuss potential issues in measurin

Aggregate Demand and Fiscal Policy Impact

This question examines how expansionary fiscal policy impacts macroeconomic equilibrium using the AD

Aggregate Demand and Its Components

Consider the concept of Aggregate Demand (AD) in the domestic economy. Explain the key components th

Aggregate Demand and Its Components Analysis

Analyze the impact of shifts in the components of aggregate demand on overall economic activity. In

Aggregate Demand Components Analysis

Examine the components of aggregate demand and analyze how changes in consumer behavior can affect o

Aggregate Demand Components and Policy Instruments

Dissect the components of Aggregate Demand and assess how fiscal policy instruments can influence th

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

Assessment of Automatic Stabilizers in Fiscal Policy Stability

Analyze the role of automatic stabilizers as built-in fiscal policy mechanisms in moderating economi

Automatic Stabilizers in Economic Downturns

During a recession, automatic stabilizers such as increased transfer payments and lower tax collecti

Automatic Stabilizers in Fiscal Policy

Automatic stabilizers play an important role in moderating economic fluctuations. (a) Define what i

Comparative Analysis of Expansionary and Contractionary Fiscal Policy

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

Contractionary Fiscal Policy in an Overheating Economy

Consider an economy operating above its full-employment level (an inflationary gap). The government

Deregulation and Its Impact on SRAS

Evaluate how deregulation in a specific industry affects short-run aggregate supply (SRAS). Analyze

Discretionary Fiscal Policy and Its Lags

Discretionary fiscal policy often suffers from implementation lags. Evaluate how these lags can affe

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 a Positive Technological Shock on the Economy

A sudden technological breakthrough increases productivity across multiple industries. Analyze how t

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

Expansionary Fiscal Policy and Aggregate Demand

In this question, you will analyze how expansionary fiscal policy influences aggregate demand and ul

Fiscal Multipliers and Policy Adjustments

The government aims to stimulate the economy by increasing GDP by $4 billion. In an economy where ho

FRQ 1: Aggregate Demand Components and Shifts

Examine the following data on the four components of aggregate demand (C, I, G, X-M) from Q1 to Q2 a

FRQ 3: Spending and Tax Multipliers

This question tests your understanding of the multiplier effect in fiscal policy. Part A: Given tha

FRQ 3: Tax Multiplier Calculation

Evaluate the tax multiplier and its impact on aggregate demand using provided data.

FRQ 5: Recessionary and Inflationary Gaps

This question examines your understanding of output gaps in the AD-AS framework. Part A: Define a r

FRQ 9: Supply Shocks and SRAS Adjustments

Discuss the impact of supply shocks on short-run aggregate supply (SRAS) and the resulting macroecon

FRQ 11: Interplay Between Money Market and AD-AS Model

Consider the transmission mechanism from monetary policy to the real economy. Part A: Draw a money

FRQ 12: Fiscal Policy for Gap Closure Using Multipliers

Consider an economy with a recessionary output gap of $40 billion below its full-employment output.

FRQ 14: Fiscal Policy, Spending, and Tax Multipliers in a Recession

Analyze the roles of spending and tax multipliers in fiscal policy during a recession.

FRQ 20: Dynamics of AD-AS Adjustments with Supply Shocks

Supply shocks cause significant shifts in the AD-AS framework. Part A: Using the AD-AS model, draw

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 Tax Policy on Aggregate Demand

Discuss how tax policy changes influence aggregate demand through the tax multiplier, and evaluate i

Input Price Shocks and the SRAS Curve

Analyze the impact of an unexpected increase in economy-wide input prices on the short-run aggregate

International Trade and Fiscal Balance: A Two-Country Model

Evaluate the effects of fiscal policy differences between two countries on international trade balan

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 Adjustments: Shifts in LRAS and Policy Implications

This question investigates how changes in technology and resources shift the long-run aggregate supp

Long-Run Self-Adjustment Following a Recessionary Gap

Explain the self-correcting mechanism that allows an economy operating below full employment to retu

Long-Run Self-Adjustment in the AD-AS Model

In this question, you will explore the long-run self-adjustment process that occurs in an economy ex

Monetary Policy and Aggregate Demand

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

Multiplier Effects and Fiscal Policy Stimulus

Examine the operation of multiplier effects in fiscal policy. Use given parameters to calculate both

Multipliers in Economic Recovery: A Comparative Analysis

Discuss the role of the spending and tax multipliers in stimulating economic recovery during a reces

Output Gap Analysis via the AD-AS Model

An economy has a full-employment output (GDPf) of $2 trillion but is currently producing only $1.8 t

Short-Run Aggregate Supply and Demand Adjustments

Using the aggregate demand and aggregate supply (AD-AS) model, assess the impact of increased govern

Supply Shock and SRAS Shift

A sudden increase in global oil prices causes an adverse supply shock in the economy. Analyze how th

Tax and Spending Multipliers in Fiscal Policy

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

Tax Policy and Tax Multipliers

Investigate the impact of changes in taxation on aggregate demand by exploring the concept of the ta

The Impact of Transfer Payments on Aggregate Demand

This question explores how transfer payments, as automatic stabilizers, impact aggregate demand in t

Asset Demand for Money under Changing Interest Rates

Investigate how asset demand for money responds to changes in the nominal interest rate.

Calculating Money Supply Expansion via Fractional Reserve Banking

Fractional reserve banking can lead to an expansion of the money supply through the money multiplier

Calculating the Money Multiplier: Impact of Excess Reserves

The money multiplier is a key concept in understanding the effects of fractional reserve banking. An

Commodity Money vs. Fiat Money

This question compares commodity money and fiat money and examines how public trust influences the v

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

Cross-Market Analysis: Money Market and Loanable Funds Market

This question examines how shocks in one financial market can spill over into another. Consider the

Digital Payments and Money Demand Shift

The growing adoption of digital payment systems may influence traditional measures of money demand.

Discount Rate Policy Effects

This question evaluates how changes in the discount rate affect commercial banks and the overall mon

Effects of Changes in the Federal Discount Rate

This question explores the role of the discount rate in monetary policy and its impact on bank behav

Equity Financing vs Debt Financing

Evaluate the advantages and disadvantages of equity and debt financing for a firm facing investment

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 Assets and the Risk-Return Tradeoff

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

Foreign Demand and the Loanable Funds Market

Investigate how foreign demand for domestic assets influences the loanable funds market. Answer the

Fractional Reserve Banking and the Money Multiplier

Fractional reserve banking is fundamental to money creation in the economy. Consider the following a

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 6: Money Supply and the Federal Reserve

Analyze how the Federal Reserve's policies influence the money supply, with particular attention to

FRQ 11: Loanable Funds Market - Demand Shifters

Examine the determinants of the demand for loanable funds and illustrate their effects on the market

Functions of Money in Daily Transactions

Money serves as a medium of exchange, a unit of account, and a store of value. Answer the following

Inflationary Expectations and Financial Asset Valuation

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

Investment Decisions: Physical Assets vs Financial Assets

Analyze the decision criteria for a firm choosing between investing in physical assets and financial

Loanable Funds Market Dynamics

Examine the loanable funds market and the factors that affect its equilibrium. Answer the following

Loanable Funds Market Dynamics

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

Monetary Multiplier and Money Creation

This question assesses your understanding of fractional reserve banking and the money multiplier eff

Monetary Policy Challenges in a Liquidity Trap

Critically assess the effectiveness of monetary policy when the economy is in a liquidity trap. Answ

Monetary Policy Effects on Aggregate Demand

Monetary policy is a key tool used by the Fed to influence economic activity. Answer the following:

Money and Liquidity: Functions and Classification

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

Money Market Equilibrium and Monetary Policy Impact

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

Money Market Equilibrium and Monetary Policy Impacts

Monetary policy operations affect the money market significantly. Use the following scenario to anal

Nominal vs. Real Interest Rates in Investment Decisions

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

Open Market Operations: Case Study of a Central Bank Policy

This question examines how open market operations (OMOs) are implemented by the central bank and the

Real vs Nominal Interest Rates and Inflation Expectations

This question focuses on how inflation expectations affect the relationship between real and nominal

Risk Premium and Its Effect on Bond Prices

Analyze how the risk premium affects bond prices and investor behavior in the fixed income market.

Risk, Liquidity, and Bond Prices

Explore the relationship between bond prices, interest rates, risk, and liquidity.

Risk, Return, and Liquidity in Investment Choices

Investors must balance risk, return, and liquidity when constructing their portfolios. Answer the fo

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

Aggregate Demand Shifts Across Different Regions of the SRAS Curve

Some economists argue that the effects of aggregate demand (AD) shifts depend on which region of the

Aggregate Price Measures and Inflation Calculation

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

Analyzing Budget Deficits, Surpluses, and National Debt

Examine the concepts of budget deficits and surpluses, and analyze their relationship with the natio

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 Stagflation and Policy Responses

Stagflation is a period when inflation and unemployment rise simultaneously. This situation poses a

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

Comparative Analysis: Demand-Pull vs. Cost-Push Inflation

Critically compare demand-pull and cost-push inflation with respect to their causes, graphical repre

Contractionary Fiscal Policy to Correct an Inflationary Gap

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

Cost-Push Inflation and the Wage-Price Spiral

Examine the dynamics of cost-push inflation and the wage-price spiral, discussing their causes and p

Crowding Out: Analyzing the Loanable Funds Market

Examine the effects of government budget deficits on the loanable funds market and private investmen

Demand-Pull vs. Cost-Push Inflation

Inflation can occur due to different economic forces. Compare and contrast demand-pull inflation wit

Evaluating the Impact of Infrastructure Spending on Long-Run Growth

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

Excessive Expansionary Fiscal Policy: Multiplier Effects and Crowding Out

Analyze the short-run and long-run consequences of an excessively expansionary fiscal policy, includ

Fiscal Deficits, National Debt, and Economic Growth

Examine the relationship between fiscal deficits, national debt, and long-run economic growth. (a)

Fiscal Policy Coordination and Its Trade-offs

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

Fiscal Policy, Budget Deficits, and National Debt

Persistent budget deficits contribute to the national debt, affecting a country’s economic stability

Fiscal Stimulus and International Trade: Effects on Net Exports

A country implements an expansionary fiscal policy during a recession, leading to increased domestic

Fiscal Stimulus and Short-Run Aggregate Demand

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

Fiscal Stimulus and the Multiplier Effect

Fiscal stimulus is often used to counteract a recessionary gap. In this question, you will analyze t

FRQ 2: Adjustment from Inflationary Gap: AD-AS Analysis

Examine the adjustment process in an inflationary gap scenario. Explain how an increase in aggregate

FRQ 8: Fiscal Policy Multipliers and Their Limitations

Analyze the fiscal policy multiplier effect and discuss the factors that can limit its impact on eco

FRQ 8: Stagflation – Causes and Policy Dilemmas

Analyze stagflation by discussing its causes and the policy dilemmas it presents.

FRQ 10: Government Deficit Spending and the Private Investment Response

Evaluate the impact of increased government deficit spending on the loanable funds market and its co

FRQ 11: National Debt, Deficits, and Macroeconomic Stability

Discuss the relationship between persistent budget deficits, national debt, and their potential impa

FRQ 12: Fiscal Stimulus in a Deep Recessionary Gap

Assess how expansionary fiscal policy can be used to close a deep recessionary gap and examine the r

FRQ 13: Aggregate Production Function and Productivity Shifts

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

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: The Relationship Between Money Supply Changes and Inflation

Using the Quantity Theory of Money, analyze how an increase in the money supply can lead to inflatio

FRQ 20: Coordination of Fiscal and Monetary Policy in an Inflationary Gap

Discuss how fiscal and monetary policies can be coordinated to address an inflationary gap, and anal

Graphical Analysis of Demand-Pull Inflation

Illustrate and explain the process of demand-pull inflation using an AD-AS framework.

Graphical Integration of AD, SRAS, and LRAS with Policy Shifts

Complex economic scenarios often involve multiple simultaneous shifts in the AD–AS framework. In thi

Impact of Human Capital Investment on Productivity and Growth

Discuss how investments in education and training can lead to improvements in workforce productivity

Impact of Supply-Side Policies on Aggregate Supply

Supply-side policies are aimed at improving the productive capacity of the economy. In this question

Investment Tax Credits and Their Effects on AS/AD

Investment tax credits are a supply-side fiscal measure intended to stimulate private investment. Ev

Monetary Policy and Economic Stabilization in Federal Systems

Effective monetary policy is crucial for economic stabilization, particularly when the central bank

Monetary Policy Effects on the Money Market and Investment

In an effort to stimulate economic activity, the central bank implements an expansionary monetary po

Monetary Policy Impact on the Loanable Funds Market

Monetary policy can indirectly influence the loanable funds market, affecting private investment. In

Monetary Policy in Recessionary Gap Correction

This question addresses the role of monetary policy in correcting a recessionary gap. When an econom

Policy Coordination: Balancing Fiscal and Monetary Policy

Modern economies often face conflicting pressures that require coordination between fiscal and monet

Recession and Deflation: A Detailed Analysis

A significant decline in aggregate demand can lead to both a recession and deflation. Analyze such a

Recessionary Gap and Long‐Run Adjustment

In an economy initially operating at full employment, a loss of consumer and firm confidence causes

Recessionary Gap: Fiscal and Monetary Policy Interaction

This question analyzes the effects of a recessionary gap resulting from a leftward shift in the aggr

Wage-Price Spiral and Inflation Dynamics

Analyze the wage-price spiral phenomenon and its implications for sustained inflation. Propose poten

Assessing the Impact of Demographic Changes on International Trade

This FRQ asks you to explore the impact of shifting consumer tastes, possibly driven by demographic

Capital Flows and Net Exports

A country’s net exports are influenced by its capital flows. Analyze how inbound and outbound capita

Central Bank Monetary Policy Effects on Exchange Rates

A central bank increases the money supply as part of an expansionary monetary policy. Use the provid

Central Bank Policy and Capital Flows

Discuss the influence of central bank policy on international capital flows. Address each part below

Comparative Analysis of Current and Capital Accounts

Analyze the differences between the current account and the capital account, and explain how transac

Comparing Economic Effects: Tariffs vs. Quotas on Imports

Compare the economic implications of a tariff and a quota on imported cars using the case provided.

Comprehensive Analysis: Policy Shifts and International Economic Equilibrium

This FRQ requires a comprehensive analysis of a complex policy scenario involving simultaneous contr

Effects of Monetary Contraction on Domestic Markets

Analyze how a contractionary monetary policy affects domestic interest rates, capital flows, and the

Evaluating Monetary Policy Impact on Exchange Rates

This FRQ focuses on the transmission mechanism of monetary policy in an open economy. Analyze how co

Exchange Rate Equilibrium: Solving with Supply and Demand Equations

This FRQ requires you to solve for the equilibrium exchange rate using given supply and demand funct

Exchange Rate Fluctuations and Speculation

Evaluate how changes in exchange rates occur due to trade dynamics and speculative behavior. Refer t

Exchange Rate Impact on Net Exports

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

Exchange Rate Regimes and Economic Stability

Analyze the advantages and disadvantages of fixed versus floating exchange rate regimes regarding ec

Fiscal Policy's Effect on Aggregate Demand and Exchange Rates

Discuss the impact of expansionary fiscal policy on aggregate demand, national income, and the excha

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

The following graph represents the foreign exchange market for U.S. dollars, with Quantity of dollar

Foreign Exchange Market Equilibrium Adjustments

Assess how speculative activities influence the equilibrium in the foreign exchange market and the r

FRQ 7: Analysis of Inbound and Outbound Capital Flows

Capital flows are a key component of the international financial system. In this question, you will

FRQ 8: Official Reserves Adjustment and the Balance of Payments

Official reserves are used by central banks to balance out imbalances in the current and capital acc

FRQ 9: Circular Flow of Dollars and Balance of Payments Adjustments

The circular flow of dollars is a fundamental concept in the balance of payments. This question requ

FRQ 12: Real Interest Rates and International Capital Flows

Real interest rates are crucial in determining international capital flows. This question requires y

FRQ 13: Effects of Global Economic Conditions on Exchange Rates

Global economic conditions, such as rising incomes in foreign economies, can influence the demand fo

FRQ 19: Capital Flows, Interest Rate Differentials, and Currency Appreciation

In this question, you will explore how differences in interest rates drive capital flows and thereby

FRQ 19: Speculation and Forex Market Volatility

Speculative trading in the foreign exchange market can lead to increased volatility and abrupt shift

Impact of Tariffs on the Domestic Steel Market

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

Impact of Unexpected Capital Flows on the Foreign Exchange Market

This FRQ addresses the effects of unexpected capital flows on the exchange rate and net exports.

Interest Rates and International Capital Flows: A Detailed Analysis

Domestic interest rate changes significantly influence international capital flows. Assess how an in

Monetary Policy Impact on Exchange Rates

An expansionary monetary policy, such as an increase in the money supply, can have significant effec

Official Reserves and Balance Adjustment

Discuss the role of the official reserves account in the balance-of-payments adjustments. Provide a

Official Reserves and Balance of Payments Adjustment

Using the following table, determine the necessary official reserves adjustment and explain its role

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 International Capital Flows

This FRQ explores how differences in real interest rates influence international capital movements.

Role of Central Bank Interventions in Foreign Exchange Markets

This FRQ examines central bank interventions in the foreign exchange market and their implications f

Speculation and Exchange Rate Movements

Discuss the role of speculative behavior in the foreign exchange market.

Tariff Impacts on Domestic Markets

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

Tariff vs. Quota: Economic Outcomes

Compare the economic effects of implementing a tariff versus an import quota. Address the following