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  1. AP Macroeconomics
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Economic Indicators and the Business Cycle

Question 1
college-boardMacroeconomicsAPExam Style
1 mark

What measure of economic activity is often used to gauge the overall health and performance of an economy?

Question 2
college-boardMacroeconomicsAPExam Style
1 mark

If the Federal Reserve sets a higher inflation target, what short-term effect might this have on unemployment?

Question 3
college-boardMacroeconomicsAPExam Style
1 mark

What is generally expected to happen with consumer spending during an expansion phase of the business cycle?

Question 4
college-boardMacroeconomicsAPExam Style
1 mark

If a central bank engages in contractionary monetary policy during an inflationary period what is likely result within business cycles?

Question 5
college-boardMacroeconomicsAPExam Style
1 mark

How would a sustained increase in exchange rate affect the domestic economy of a small open economy heavily dependent on raw material exports?

Question 6
college-boardMacroeconomicsAPExam Style
1 mark

If a country is experiencing high inflation with moderate growth, which monetary policy action could potentially bring down the inflation rate without significantly hindering economic growth?

Question 7
college-boardMacroeconomicsAPExam Style
1 mark

In response to high inflation rates, how might expansionary fiscal policy affect real GDP in the short run if it results in crowding out?

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Question 8
college-boardMacroeconomicsAPExam Style
1 mark

What term describes periods of expansion followed by periods of recession in the economy?

Question 9
college-boardMacroeconomicsAPExam Style
1 mark

What role does government play when it provides unemployment benefits during a recession?

Question 10
college-boardMacroeconomicsAPExam Style
1 mark

What is one characteristic of the expansion phase of the business cycle?