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  1. AP Macroeconomics
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Economic Indicators and the Business Cycle

Question 1
college-boardMacroeconomicsAPExam Style
1 mark

If a central bank successfully implements inflation targeting, what is the most likely short-term effect on price stability?

Question 2
college-boardMacroeconomicsAPExam Style
1 mark

What mechanism can governments utilize to address overconsumption and limit resource resulting in negative externalities?

Question 3
college-boardMacroeconomicsAPExam Style
1 mark

Which scenario can lead to hyperinflation?

Question 4
college-boardMacroeconomicsAPExam Style
1 mark

If the central bank aims to reduce inflation that is primarily caused by excess demand, which policy combination would be most effective in achieving this goal without severely impacting long-term economic growth?

Question 5
college-boardMacroeconomicsAPExam Style
1 mark

What term describes the reduction in purchasing power due to rising overall price levels?

Question 6
college-boardMacroeconomicsAPExam Style
1 mark

What impact does inflation have on people with long-term fixed-rate loans?

Question 7
college-boardMacroeconomicsAPExam Style
1 mark

Given That Anticipated Inflation Can Lead Contract Indexation And Escalation Clauses, Which Scenario Would Likely Occur For Long Term Contracts?

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Question 8
college-boardMacroeconomicsAPExam Style
1 mark

What is the term used to describe the decrease in the value of the individual dollar over time due to inflation?

Question 9
college-boardMacroeconomicsAPExam Style
1 mark

Who may find it difficult to keep up with rising prices if their income does not increase at the same rate as inflation?

Question 10
college-boardMacroeconomicsAPExam Style
1 mark

What could be a potential short-term side effect for an economy immediately after adopting a strict inflation targeting policy?