AP Macroeconomics
Exam Questions And
Correct Answers
(Verified Answers)
Plus Rationales
2025/2026 Q&A |
Instant Download Pdf
1.
What does GDP measure?
A. Total value of all goods produced domestically and abroad
B. Total value of final goods and services produced within a
country in a year
C. Total income of government only
D. Total exports minus imports
,Rationale: GDP counts final goods/services produced within
a country’s borders over a specific time period.
2.
Which is NOT included in GDP?
A. Government spending
B. Investment
C. Used goods sales
D. Consumption
Rationale: Used goods are not counted because they were
already included in past GDP.
3.
Unemployment rate is calculated as:
A. Employed / population
B. Unemployed / labor force
C. Labor force / population
D. Employed / unemployed
Rationale: It measures unemployed workers as a
percentage of the labor force.
4.
Inflation is best defined as:
A. Decrease in prices
B. Sustained increase in general price level
C. Increase in GDP
,D. Increase in wages only
Rationale: Inflation refers to rising overall price levels, not
just one sector.
5.
Which is a fiscal policy tool?
A. Interest rates
B. Government spending
C. Money supply
D. Reserve requirements
Rationale: Fiscal policy involves government spending and
taxation.
6.
Monetary policy is controlled by:
A. Congress
B. President
C. Central bank (Federal Reserve in the U.S.)
D. World Bank
Rationale: The central bank controls money supply and
interest rates.
7.
An increase in interest rates will:
A. Increase borrowing
B. Decrease investment spending
, C. Increase inflation
D. Increase money supply
Rationale: Higher interest rates discourage borrowing and
investment.
8.
Which is part of aggregate demand?
A. Labor supply
B. Consumption
C. Productivity
D. Technology
Rationale: Aggregate demand includes consumption,
investment, government spending, and net exports.
9.
A rightward shift in aggregate demand causes:
A. Lower GDP and lower price level
B. Higher GDP and higher price level
C. Lower GDP and higher unemployment
D. No change in output
Rationale: Increased demand raises output and prices in the
short run.
10.
The unemployment type caused by skill mismatch is:
A. Cyclical
Exam Questions And
Correct Answers
(Verified Answers)
Plus Rationales
2025/2026 Q&A |
Instant Download Pdf
1.
What does GDP measure?
A. Total value of all goods produced domestically and abroad
B. Total value of final goods and services produced within a
country in a year
C. Total income of government only
D. Total exports minus imports
,Rationale: GDP counts final goods/services produced within
a country’s borders over a specific time period.
2.
Which is NOT included in GDP?
A. Government spending
B. Investment
C. Used goods sales
D. Consumption
Rationale: Used goods are not counted because they were
already included in past GDP.
3.
Unemployment rate is calculated as:
A. Employed / population
B. Unemployed / labor force
C. Labor force / population
D. Employed / unemployed
Rationale: It measures unemployed workers as a
percentage of the labor force.
4.
Inflation is best defined as:
A. Decrease in prices
B. Sustained increase in general price level
C. Increase in GDP
,D. Increase in wages only
Rationale: Inflation refers to rising overall price levels, not
just one sector.
5.
Which is a fiscal policy tool?
A. Interest rates
B. Government spending
C. Money supply
D. Reserve requirements
Rationale: Fiscal policy involves government spending and
taxation.
6.
Monetary policy is controlled by:
A. Congress
B. President
C. Central bank (Federal Reserve in the U.S.)
D. World Bank
Rationale: The central bank controls money supply and
interest rates.
7.
An increase in interest rates will:
A. Increase borrowing
B. Decrease investment spending
, C. Increase inflation
D. Increase money supply
Rationale: Higher interest rates discourage borrowing and
investment.
8.
Which is part of aggregate demand?
A. Labor supply
B. Consumption
C. Productivity
D. Technology
Rationale: Aggregate demand includes consumption,
investment, government spending, and net exports.
9.
A rightward shift in aggregate demand causes:
A. Lower GDP and lower price level
B. Higher GDP and higher price level
C. Lower GDP and higher unemployment
D. No change in output
Rationale: Increased demand raises output and prices in the
short run.
10.
The unemployment type caused by skill mismatch is:
A. Cyclical
