AP Macro 1-2 nine-weeks

A production possibilities curve that is concave to the origin (bowed out) implies that as more of a good is produced, the opportunity cost…?

A production possibilities curve that is concave to the origin (bowed out) implies that as more of a good is produced, the opportunity cost…?

increases

In the long run, government subsidies that promote the development of technology with widespread business applications will have which of the following effects?

a positive supply shock and lower price level

Olivia volunteers full time and will not accept any offers for a paid job for 6 months.

cyclically unemployed

With an expansionary fiscal policy, what will most likely happen to the real gross domestic products (GDP) and the nominal interest rate in the short run?

real gdp increases and nominal interest rates increase

Economic growth is best measured by a sustained increase in which of the following?

per Capita GDP

The long run Philips curve indicates that there are no trade-offs between

inflation/unemployment

Assume that a country’s government increases borrowing. What will most likely happen to the prices of previously issued bonds and the price level in the short run?

decrease bond prices and increase the price level.

The graph above shows the foreign exchange market for the United States dollars in terms of Japanese yen. assume that there is an increase in United States consumers’ preference for Japanese automobiles. Which of the following changes will most likely take place in the market for dollars?

The supply of dollars will increase

According to the data above, in which year was real gross domestic product (GDP) the largest?

2010

Which of the following will happen if a country’s government reduces business taxes?

The short-run aggregate supply curve will shift to the right

In the coffee market, which of the following changes will increase the price and decrease the quantity of coffee?

the supply decreases with no change or an increase in demand

An increase in inventories will increase which component of gross domestic product?

investment expenditures

If real output is $9,000 and the price level is 2, and the velocity of money is 3, then the money supple is?

$6,000

Assume a country’s banking system has ample reserves. Which of the following combinations of fiscal and monetary policy will reduce the price level?

decreasing government spending and increasing administered interest rates

All of the following may result in increases in real gross domestic product in the long run EXCEPT

a decrease in factor productivity

If government spending increases and at the same time a country’s central bank conducts monetary policy to increase its policy rate, the interest rate and private investment in plant and equipment will most likely change in which of the following ways?

Interest rate will increase and private investment in plant and equipment will decrease

Which of the following would cause a movement from point S to point R on the short-run Phillips curve before?

an unanticipated increase in government spending

If policy makers use fiscal policy to reduce inflation, which of the following will most likely happen in the short run?

the unemployment rate will increase

Crowding out occurs when investment spending by the private sector decreases as a result of

increasing interest rates caused by an increase in government borrowing

Assume that a nation’s real gross domestic (GDP) grows at a higher rate than its population over a given period of time. It can be concluded that

real GDP per Capita has increased

Assume that banks hold no excess reserves. A decrease in the required reserve ratio will cause total reserves in banks, the money multiplier, and the money supply to change in which of the following ways?

reserves: no change

money multiplier: increase

money supply: increase

If consumer price goes to 200 form 240 then what percent did it increase?

20%

In the long run, a fully anticipated expansion of the money supply will

(A): increase both the price level and real gross domestic product.

Which of the following policy actions will promote long-run economic growth?

d. Increasing investment in human capital

Which of the following transactions would increase the current account surplus in Japan’s balance of payments accounts?

A. A Japan-based company sells roasted coffee to Canada.

Suppose countries Alphania and Betania produce electronics and apparel using identical resources. Which of the following is true if Alphania exports electronics to and imports apparel from Betania within a free trade system?

B. Betania has a comparative advantage in producing apparel, and Alphania has a comparative advantage in producing electronics