AP Macroeconomics Unit 3 Progress
Check: MCQ (Latest Update )
Questions & Answers 100% Correct -
(Grade A)
Which of the following represents an appropriate fiscal policy for the given economic
conditions? - correct answer A contractionary fiscal policy is appropriate to reduce
inflation when there is an inflationary gap.
The government of Olympia is considering a fiscal policy action to slow the economy
and curb inflation. If the marginal propensity to consume is 0.8, which of the following
responses correctly identifies a policy action that would help the government achieve
its goals and the impact of that action on Olympia's real gross domestic product (GDP)?
- correct answer Decreasing government spending by $10 billion decreases real GDP
by a maximum of $50 billion.
What is an automatic stabilizer? - correct answer It is a program or policy that
counteracts the business cycle without any new government action required.
Which of the following best explains how income taxes can moderate a business cycle
during an expansion? - correct answer Tax revenues increase automatically as gross
domestic product (GDP) rises, which dampens consumption spending.
, How will automatic stabilizers affect the economy during a recession? - correct
answer They will shift the aggregate demand curve to the right, increasing real output.
Which of the following best describes the aggregate demand curve? - correct answer
It is a curve that shows the level of spending by consumers, businesses, the
government, and the foreign sector at different price levels.
Which of the following explains the relationship between the price level and real
output along the aggregate demand curve? - correct answer At a lower price level,
domestic goods will become less expensive compared to foreign goods, which causes
an increase in spending on domestic goods.
The government of Euroland is considering increasing government spending to avoid a
recession. What is the most likely effect on aggregate demand (AD) in Euroland? -
correct answer There will be a rightward shift in the AD curve.
Assume the marginal propensity to consume is 0.75. What will happen if government
spending increases by $100 billion? - correct answer Real output will increase by a
maximum of $400 billion.
Check: MCQ (Latest Update )
Questions & Answers 100% Correct -
(Grade A)
Which of the following represents an appropriate fiscal policy for the given economic
conditions? - correct answer A contractionary fiscal policy is appropriate to reduce
inflation when there is an inflationary gap.
The government of Olympia is considering a fiscal policy action to slow the economy
and curb inflation. If the marginal propensity to consume is 0.8, which of the following
responses correctly identifies a policy action that would help the government achieve
its goals and the impact of that action on Olympia's real gross domestic product (GDP)?
- correct answer Decreasing government spending by $10 billion decreases real GDP
by a maximum of $50 billion.
What is an automatic stabilizer? - correct answer It is a program or policy that
counteracts the business cycle without any new government action required.
Which of the following best explains how income taxes can moderate a business cycle
during an expansion? - correct answer Tax revenues increase automatically as gross
domestic product (GDP) rises, which dampens consumption spending.
, How will automatic stabilizers affect the economy during a recession? - correct
answer They will shift the aggregate demand curve to the right, increasing real output.
Which of the following best describes the aggregate demand curve? - correct answer
It is a curve that shows the level of spending by consumers, businesses, the
government, and the foreign sector at different price levels.
Which of the following explains the relationship between the price level and real
output along the aggregate demand curve? - correct answer At a lower price level,
domestic goods will become less expensive compared to foreign goods, which causes
an increase in spending on domestic goods.
The government of Euroland is considering increasing government spending to avoid a
recession. What is the most likely effect on aggregate demand (AD) in Euroland? -
correct answer There will be a rightward shift in the AD curve.
Assume the marginal propensity to consume is 0.75. What will happen if government
spending increases by $100 billion? - correct answer Real output will increase by a
maximum of $400 billion.
