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AP Economics:
Economic Goals and Measurements Review MCs
May 5, 2015
1. During the recession phase of a business cycle, which of the following is likely to increase?
a. The unemployment rate
b. The price level
c. Economic growth rates
d. The labor force
e. Wages
2. GDP is equal to
a. the total value of all goods and services produced in an economy in a given period
b. C + I + G + imports
c. The total value of intermediate goods plus final goods
d. The total income received by producers of final goods and services
e. None of the above
3. If your nominal wage doubles at the same time as prices double, your real wage will
a. increase
a. decrease
b. not change
c. double
d. be impossible to determine
4. If the consumer price index increases from 80 to 120 from one year to the next, the
inflation rate over that time period was
a. 20%
b. 40%
c. 50%
d. 80%
e. 120%
5. To be considered unemployed, a person must
i. Not be working
ii. Be actively seeking a job
iii. Be available for work
a. i only
b. ii only
c. iii only
d. ii and iii
e. i, ii and iii
6. What type of unemployment is caused by a recession?
a. Frictional
b. Structural
c. Cyclical
d. Natural
e. None of the above
7. In the circular flow diagram, which of the following is true in resource (factor) markets?
a. Households buy resources from business firms
b. Households sell products to business firms
c. Households sell resources to business firms
d. Business firms sell goods and services to households
e. Business firms sell resources to households
8. Which of the following purchases is included in the calculation of GDP?
a. A used economics textbook from the bookstore
b. New harvesting equipment for the farm
c. 1,000 shares of stock in a computer firm
d. A car produced in a foreign country
e. Government bonds issued by a foreign firm
9. When the actual inflation rate is greater than the anticipated inflation rate, which of the
following is most likely to suffer?
a. Those who lend at a fixed interest rate
b. Those who borrow at a fixed interest rate
c. Retired persons with a cost-of-living adjustment in their benefits
d. Employers who hire workers with long-term labor contracts
e. Those who end with flexible interest rates
10. The largest dollar amount of national income is
a. Rental payments
b. Government expenditures on goods and services
c. Profit
d. Net interest
e. Wages and salaries to employees