FREE HISTORY AND STUDY GAMES ABOUT UNIT3 VOCAB

PDF Download

FREE HISTORY AND STUDY GAMES ABOUT UNIT3 VOCAB

AP MACRO EXAM QUESTIONS

Actual Qs and Ans Expert-Verified Explanation

This Exam contains:

-Guarantee passing score -13 Questions and Answers -format set of multiple-choice -Expert-Verified Explanation

Question 1: marginal propensity to save (MPS)

Answer:

the fraction of any change in disposable income that households save; equal to the change in saving divided by the change in disposable income

Question 2: Crowding-out Effect

Answer:

a rise in interest rates and a resulting decrease in planned investment caused by the Federal government's increased borrowing in the money market

Question 3: Multiplier effect

Answer:

the effect on equilibrium GDP of a change in aggregate expenditures or aggregate demand (caused by a change in the consumption schedule, investment, government expenditures, or net exports)

Question 4: Contractionary Fiscal Policy

Answer:

a decrease in government purchases for goods and services, an increase in net taxes, or some combination of the two, for the purpose of the decreasing AD and thus controlling inflation

Question 5: Expansionary Fiscal Policy

Answer:

an increase in government purchases of goods and services, a decrease in net taxes, or some combination of the two for the purpose of increasing AD and expanding real output

Question 6: Aggregate Supply (AS)

Answer:

a schedule or curve showing the total amount spent for final goods and services at different levels of real GDP

Question 7: Determinants of AS

Answer:

factors such as input prices, productivity, and the legal-institutional environment that if they change, shift the AS curve

Question 8: Inflationary Gap

Answer:

the amount by which the aggregate expenditures schedule must shift downward to decrease the nominal GDP to its full-employment noninflationary level

Question 9: average propensity to save (APS)

Answer:

fraction (or percentage) of disposable income that households save; saving divided by disposable income

Question 10: Aggregate Demand (AD)

Answer:

a schedule or curve that shows the total quantity of goods and services demanded (purchased) at different price levels

Question 11: marginal propensity to consume (MPC)

Answer:

the fraction of any change in disposable income spent for consumer goods; equal to the change in consumption divided by the change in disposable income

Question 12: Determinants of AD

Answer:

factors such as consumption spending, investment, government spending, and net exports that, if they change, shift the AD curve

Question 13: average propensity to consume (APC)

Answer:

fraction (or percentage) of disposable income that households plan to spend for consumer goods and services; consumption divided by disposable income