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  1. AP Macroeconomics
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Economic Indicators and the Business Cycle

Question 1
college-boardMacroeconomicsAPExam Style
1 mark

How might an economy transition from low levels of inflation to hyperinflation?

Question 2
college-boardMacroeconomicsAPExam Style
1 mark

Which scenario demonstrates stagflation?

Question 3
college-boardMacroeconomicsAPExam Style
1 mark

What does it indicate about an economy if its core inflation rate rises steadily but its headline inflation remains constant?

Question 4
college-boardMacroeconomicsAPExam Style
1 mark

What long-term impact might consistent inflation targeting by a country's central bank have on its currency value?

Question 5
college-boardMacroeconomicsAPExam Style
1 mark

When economists want to measure inflation that includes imports but excludes volatile food and energy prices, which version of CPI do they typically use?

Question 6
college-boardMacroeconomicsAPExam Style
1 mark

What happens when central banks respond too aggressively new signs slowing economic activity?

Question 7
college-boardMacroeconomicsAPExam Style
1 mark

If a country's inflation rate is higher than that of its trading partners, how would this most likely affect the country's exchange rate in the short term?

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Question 8
college-boardMacroeconomicsAPExam Style
1 mark

Which factor typically influences whether a government pursues expansionary or contractionary fiscal policies?

Question 9
college-boardMacroeconomicsAPExam Style
1 mark

What is the relationship between the inflation rate and the purchasing power of money?

Question 10
college-boardMacroeconomicsAPExam Style
1 mark

How does establishing an explicit inflation target potentially impact interest rates set by a nation's central bank?