Macroeconomics AP Exam Review
2025 Questions and Answers
Ms. Smith withdraws $1,000 from her safe and deposits the money in a bank. If the
bank holds no excess reserves and the reserve requirement is 10 percent, how will this
deposit increase the bank's required reserves and the bank's loans? - ✔✔RR: $100, L:
$900
A country can have an increased surplus in its balance of trade as a result of -
✔✔declining imports and rising exports
Country X has a budget deficit. Which of the following changes in government budgets
outlays and tax revenues will result in a decrease in Country X's government budget
deficit? - ✔✔GS: Rise by $400 mil, TR: Rise by $600 mil
Fred Jones withdraws $1,000 in cash from his savings account. What immediate effect
does this transaction have on the monetary aggregate measures of M1 and M2? -
✔✔M1: Increases, M2: No change
What is true about inflationary expectations? - ✔✔The actual unemployment rate equals
the natural rate of unemployment when wages fully adjust to expected inflation.
Which of the following transactions is included in the financial account of Country X's
balance of payments accounts? - ✔✔An individual in Country X buys new government
bonds issued by Country E.
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 1
2025 Questions and Answers
Ms. Smith withdraws $1,000 from her safe and deposits the money in a bank. If the
bank holds no excess reserves and the reserve requirement is 10 percent, how will this
deposit increase the bank's required reserves and the bank's loans? - ✔✔RR: $100, L:
$900
A country can have an increased surplus in its balance of trade as a result of -
✔✔declining imports and rising exports
Country X has a budget deficit. Which of the following changes in government budgets
outlays and tax revenues will result in a decrease in Country X's government budget
deficit? - ✔✔GS: Rise by $400 mil, TR: Rise by $600 mil
Fred Jones withdraws $1,000 in cash from his savings account. What immediate effect
does this transaction have on the monetary aggregate measures of M1 and M2? -
✔✔M1: Increases, M2: No change
What is true about inflationary expectations? - ✔✔The actual unemployment rate equals
the natural rate of unemployment when wages fully adjust to expected inflation.
Which of the following transactions is included in the financial account of Country X's
balance of payments accounts? - ✔✔An individual in Country X buys new government
bonds issued by Country E.
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 1
