AP Macro 3.2 Quiz

Which of the following best describes aggregate supply?

• A schedule indicating the level of real output that will be produced at each possible price level
• A schedule indicating the level of real output that will be purchased at each possible price level
• A schedule showing the trade-off between inflation and unemployment
• A schedule showing the relationship between inputs and outputs

The long-run aggregate supply curve will shift to the right when

• foreign exports increase

• government spending increases

• investment increases

• consumption increases

A rightward shift in the aggregate demand curve with a horizontal aggregate supply curve will cause employment and the price level to change in which of the following ways?

• Increase Employment; Increase Price Level
• Increase Employment; No Change to Price Level
• No Change to Employment, Increase Price Level
• Increase Employment; Decrease Price Level

Which would be least appropriate for expansionary fiscal policy

• Increase taxes
• Decrease taxes
• Increase government spending
• Combination of decreasing taxes and increasing spending

This group is responsible for implementing fiscal policy

• Supreme Court

• Federal Reserve Board

• Council of Economic Advisors

• U.S. Congress

The goal of fiscal policy is to achieve full employment by shifting this curve:

• Long Run Aggregate Supply
• Aggregate Demand
• Short Run Aggregate Supply
• Phillips

What is NOT a consequence of expansionary fiscal policy?

• AD shifts Right
• Increased Price levels
• increased output
• increased unemployment

What is NOT a consequence of expansionary fiscal policy?

• AD shifts Right
• Increased Price levels
• increased output
• increased unemployment

Which of the following are responsible for making fiscal policy decision? 

• The President and Congress
• The Federal Reserve System
• The National Council of Economic Advisors
• The commerce Department

If an economy experiences a dramatic rise in prices, which fiscal policy action could be taken?

• Selling securities on the open market

• Raising interest rates

• Reducing government spending

• Raising reserve requirements