AP MACROECONOMICS FINAL PAPER 2026
COMPLETE QUESTIONS AND VERIFIED
SOLUTIONS
◉ Shift of Short-Run Phillips Curve. Answer: Shift in SRAS (shift is in
opposite direction)
◉ Shift of Long-Run Phillips Curve. Answer: Factors of
Production/Shift in LRAS (shift is in opposite direction)
◉ Factors of Production. Answer: 1. Land
2. Labor
3. Capital
4. Technology
5. Sometimes Foreign Trade
◉ Shifters of Demand for Loanable Funds. Answer: 1. Incentive to
Invest
2. Contractionary Fiscal Policy (to the right)
◉ Shifters of Supply of Loanable Funds. Answer: 1. Incentive to Save
2. Monetary Policy
,3. Expansionary Fiscal Policy (to the left)
◉ Shifters of Money Supply. Answer: Monetary Policy
◉ Shifters of Money Demand. Answer: 1. Price Level
2. Income
3. Fiscal Policy
◉ Shifters of Long-Run Aggregate Supply. Answer: Factors of
Production
◉ Shifters of Short-Run Aggregate Supply. Answer: 1. Factors of
Production (LRAS)
2. Input Costs
3. Supply Shock
◉ Shifters of Aggregate Demand. Answer: 1. GDP (or its
components)
2. Monetary Policy
3. Fiscal Policy
◉ PPC Graph. Answer:
,◉ Demand and Supply Graph. Answer:
◉ Business Cycle. Answer:
◉ Short Run AD/AS Graph. Answer:
◉ Money Market Graph. Answer:
◉ Loanable Funds Graph. Answer:
◉ Investment Demand Graph. Answer:
◉ Foreign Exchange Graph. Answer:
◉ Phillips Curve. Answer:
◉ GDP = C + I + G + Xn. Answer: The expenditure approach to
measuring GD correlates well with aggregate demand (AD)
◉ GDP = W + I + R + P. Answer: The income approach to measuring
GDP correlates well with aggregate supply
, ◉ Calculating Nominal GDP. Answer: The quantity of various goods
produced in a nation times their current prices, added together.
◉ GDP Deflator. Answer: A price index used to adjust nominal GDP
to arrive at real GDP. Called the "deflator" because nominal GDP will
usually overstate the value of a nation's output if there has been
inflation. The Consumer Price Index (CPI) is another commonly used
price index.
◉ GDP Growth Rate:. Answer: ( Current year's GDP - Last year's
GDP)/ (Last year's GDP) x 100. The GDP growth rate is a percentage
change in a nation's real output between one year and the next.
◉ The Inflation Rate via the CPI. Answer: (This year's CPI - Last
year's CPI)/(Last year's CPI) x 100. The inflation rate is the
percentage change in the CPI from one period to the next.
◉ Real Interest Rate. Answer: the interest rate corrected for the
effects of inflation; Nominal interest rate - inflation rate
◉ Unemployment Rate. Answer: (Number of unemployed/Number
in the labor force) x 100. The labor force includes all non-
institutionalized people of working age who are employed or
seeking employment.
COMPLETE QUESTIONS AND VERIFIED
SOLUTIONS
◉ Shift of Short-Run Phillips Curve. Answer: Shift in SRAS (shift is in
opposite direction)
◉ Shift of Long-Run Phillips Curve. Answer: Factors of
Production/Shift in LRAS (shift is in opposite direction)
◉ Factors of Production. Answer: 1. Land
2. Labor
3. Capital
4. Technology
5. Sometimes Foreign Trade
◉ Shifters of Demand for Loanable Funds. Answer: 1. Incentive to
Invest
2. Contractionary Fiscal Policy (to the right)
◉ Shifters of Supply of Loanable Funds. Answer: 1. Incentive to Save
2. Monetary Policy
,3. Expansionary Fiscal Policy (to the left)
◉ Shifters of Money Supply. Answer: Monetary Policy
◉ Shifters of Money Demand. Answer: 1. Price Level
2. Income
3. Fiscal Policy
◉ Shifters of Long-Run Aggregate Supply. Answer: Factors of
Production
◉ Shifters of Short-Run Aggregate Supply. Answer: 1. Factors of
Production (LRAS)
2. Input Costs
3. Supply Shock
◉ Shifters of Aggregate Demand. Answer: 1. GDP (or its
components)
2. Monetary Policy
3. Fiscal Policy
◉ PPC Graph. Answer:
,◉ Demand and Supply Graph. Answer:
◉ Business Cycle. Answer:
◉ Short Run AD/AS Graph. Answer:
◉ Money Market Graph. Answer:
◉ Loanable Funds Graph. Answer:
◉ Investment Demand Graph. Answer:
◉ Foreign Exchange Graph. Answer:
◉ Phillips Curve. Answer:
◉ GDP = C + I + G + Xn. Answer: The expenditure approach to
measuring GD correlates well with aggregate demand (AD)
◉ GDP = W + I + R + P. Answer: The income approach to measuring
GDP correlates well with aggregate supply
, ◉ Calculating Nominal GDP. Answer: The quantity of various goods
produced in a nation times their current prices, added together.
◉ GDP Deflator. Answer: A price index used to adjust nominal GDP
to arrive at real GDP. Called the "deflator" because nominal GDP will
usually overstate the value of a nation's output if there has been
inflation. The Consumer Price Index (CPI) is another commonly used
price index.
◉ GDP Growth Rate:. Answer: ( Current year's GDP - Last year's
GDP)/ (Last year's GDP) x 100. The GDP growth rate is a percentage
change in a nation's real output between one year and the next.
◉ The Inflation Rate via the CPI. Answer: (This year's CPI - Last
year's CPI)/(Last year's CPI) x 100. The inflation rate is the
percentage change in the CPI from one period to the next.
◉ Real Interest Rate. Answer: the interest rate corrected for the
effects of inflation; Nominal interest rate - inflation rate
◉ Unemployment Rate. Answer: (Number of unemployed/Number
in the labor force) x 100. The labor force includes all non-
institutionalized people of working age who are employed or
seeking employment.
