National Income and Price
Determination:
Sample Questions
AP Economics
Mr. Bordelon
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AP Economics: National Income and Price Determination Sample Questions, Essays (university) of Business Systems
A set of sample questions for the ap economics exam, focusing on topics related to national income and price determination. The questions cover various concepts such as consumption functions, disposable income, marginal propensity to consume, autonomous consumption, wealth effect, money supply, short-run aggregate supply (sras), long-run aggregate supply (lras), and fiscal policy.
Typology: Essays (university)
2016/2017
1 / 46
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National Income and Price Determination: Sample Questions AP Economics Mr. Bordelon
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- (^) Suppose GDP is $8,000, autonomous consumption is $500, and planned investment spending is $200. The marginal propensity to consume is 0.8. Which of the following is an accurate equation for the consumption function? a. C = 8,000 + 0.8YD b. (^) C = 8,700 + 0.2YD c. (^) C = 500 + 0.8YD d. (^) C = 1,700 + 0.2YD e. (^) C = 700 + 0.8YD
Disposable Income (in billions) Consumer Spending (in billions) $0 $ 200 220 400 340 600 460 800 580 1000 700 Referring to the table provided, the autonomous consumer spending is: a. $200. b. $100. c. $120. d. $0. e. $220.
If the marginal propensity to consume is 0.5, individual autonomous consumption is $10,000, and disposable income is $40,000, then individual consumption spending is: a. $20,000. b. $25,000. c. $30,000. d. $45,000. e. $50,000.
If the marginal propensity to consume is 0.5, individual autonomous consumption is $10,000, and disposable income is $40,000, then individual consumption spending is: a. $20,000. b. $25,000. c. $30,000. d. $45,000. e. $50,000.
If the MPC is 0.8, then the multiplier is: a. 4. b. 5. c. 8. d. 10. e. 2.
According to the wealth effect, when the price level decreases, the purchasing power of assets: a. decreases and consumer spending decreases. b. increases and consumer spending decreases. c. decreases and consumer spending increases. d. remains constant and consumer spending is unchanged. e. increases and consumer spending
A decrease in the money supply is likely to cause: a. an increase in money holdings, higher interest rates and a decrease in aggregate demand. b. an increase in money holdings, higher interest rates and an increase in aggregate demand. c. a decrease in money holdings, lower interest rates and a decrease in aggregate demand. d. a decrease in money holdings, lower interest rates and an increase in aggregate demand. e. a decrease in money holdings, higher interest rates and a decrease in aggregate demand.
A decrease in the money supply is likely to cause: a. an increase in money holdings, higher interest rates and a decrease in aggregate demand. b. an increase in money holdings, higher interest rates and an increase in aggregate demand. c. a decrease in money holdings, lower interest rates and a decrease in aggregate demand. d. a decrease in money holdings, lower interest rates and an increase in aggregate demand. e. a decrease in money holdings, higher interest rates and a decrease in aggregate demand.
The economy is in a recession. Which of the following is a fiscal policy that the government should adopt to strengthen the economy? a. A decrease in government transfer payments. b. An increase in government purchases of goods and services. c. An increase in tax rates. d. A decrease in interest rates. e. An increase in the money supply.
Which of the following policies will shift AD to the left? a. The government increases its level of spending in the economy. b. The government increases transfer payments to households. c. The Federal Reserve increases the money supply in the economy. d. The government decreases its level of taxation in the economy. e. The government increases its level of taxation in the economy.
Which of the following would likely cause the SRAS to shift left? a. a decrease in consumer spending. b. a decrease in the price of imported oil. c. an increase in the price of imported oil. d. an increase in consumer spending. e. an increase in personal income taxes.
Which of the following would likely cause the SRAS to shift left? a. a decrease in consumer spending. b. a decrease in the price of imported oil. c. an increase in the price of imported oil. d. an increase in consumer spending. e. an increase in personal income taxes.