AP Macro Final Review

Front

When one decision is made, the next best alternative not selected is called

Back

opportunity cost

Front

What type of unemployment is Peggy MOST likely experiencing if she is unable to find a job that suits her interests right away? Options: Structural, Seasonal, Frictional, Cyclical

Back

Frictional

Front

The BEST example of structural unemployment in an economy is someone whose job skills do not match the economy's needs.

Back

Structural unemployment occurs when there is a mismatch between the skills of the workforce and the needs of the economy.

Front

What would you conclude about an economy characterized by increasing gross domestic product (GDP), low unemployment, and increasing inflation?

Back

This economy is in the expansion phase of a business cycle.

Front

When the Federal Reserve buys government securities/bonds on the open market, what effect does this action have on the nation's money supply and aggregate demand?

Back

money supply increases; aggregate demand increases

Front

Monetary policies the Federal Reserve can adopt include all of the following EXCEPT: raising the discount rate, buying government bonds, lowering the reserve requirement, raising personal income tax rates.

Back

raising personal income tax rates.

Front

The Federal Reserve wants to reduce the nation's money supply. This could be accomplished by doing all of the following EXCEPT: decreasing the discount rate, increasing the reserve requirement, selling securities on the open market, making banks hold a reserve for all types of deposits.

Back

decreasing the discount rate.

Front

If the unemployment rate is rising and GDP is falling, what fiscal policy action should the federal government MOST likely follow? Options: decreasing taxes, decreasing spending, decreasing the money supply, decreasing the reserve requirement.

Back

decreasing taxes.

Front

Importing more than exporting is

Back

trade deficit

Front

Is Consumer Spending the largest portion of GDP?

Back

True