AP MACRO UNIT 3 QUIZ WITH 100% CORRECT ANSWERS { GRADED +}

AP MACRO UNIT 3 QUIZ WITH 100%

CORRECT ANSWERS { GRADED +}




Progressive tax - ✔✔A tax for which the percentage of income paid in

taxes increases as income increases


Regressive tax - ✔✔A tax for which the percentage of income paid in

taxes decreases as income increases


Proportional and flat tax - ✔✔a tax in which people pay an identical

rate regardless of income or economic transaction


Interest rate effect - ✔✔When price level increases, lenders need to

change higher interest rates to get a real return on their loans


Interest formula - ✔✔principal x interest rate x time

, Foreign Trade Effect - ✔✔When U.S. price level increases, foreign

buyers purchase fewer U.S. goods and Americans buy more foreign

goods. Exports fall and imports rise causing real GDP demanded to

decrease. One of the reasons why AD is downward sloping.


Shifters in aggregate supply - ✔✔Change in inflationary Expectations


Change in resource prices

Change in actions of the government

Change in productivity


Shifters in Long Run Aggregate supply - ✔✔Change in number of

workers

Change in number of resources

Change in number of capital (tools/marketing)


Inflationary gap - ✔✔The amount by which equilibrium GDP exceeds

full-employment GDP.