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  2. AP Macroeconomics
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Economic Indicators and the Business Cycle

Question 1
MacroeconomicsAPConcept Practice
1 mark

Which of the following is a component of the circular flow model?

Question 2
MacroeconomicsAPConcept Practice
1 mark

What does Gross Domestic Product (GDP) measure?

Question 3
MacroeconomicsAPConcept Practice
1 mark

Using the expenditure approach, calculate GDP given the following values: Consumption (C) = 500,Investment(I)=500, Investment (I) =500,Investment(I)=200, Government Spending (G) = 100,Exports(X)=100, Exports (X) =100,Exports(X)=50, Imports (M) = $30.

Question 4
MacroeconomicsAPConcept Practice
1 mark

A company produces 1millionworthofsteelandsellsittoacarmanufacturerfor1 million worth of steel and sells it to a car manufacturer for1millionworthofsteelandsellsittoacarmanufacturerfor1.5 million. The car manufacturer uses the steel to produce cars, which are then sold for $3 million. How does this affect GDP?

Question 5
MacroeconomicsAPConcept Practice
1 mark

Which of the following best describes Nominal GDP?

Question 6
MacroeconomicsAPConcept Practice
1 mark

If Nominal GDP is $20 trillion and the GDP deflator is 125, what is Real GDP?

Question 7
MacroeconomicsAPConcept Practice
1 mark

Why is real GDP a better measure of economic growth than nominal GDP?

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Question 8
MacroeconomicsAPConcept Practice
1 mark

What is inflation?

Question 9
MacroeconomicsAPConcept Practice
1 mark

The CPI in Year 1 was 200, and the CPI in Year 2 was 210. What is the inflation rate between Year 1 and Year 2?

Question 10
MacroeconomicsAPConcept Practice
1 mark

Which phase of the business cycle represents the highest point of economic activity?