The Exam

AP⑩ lMacroeconoΠ ⒒cs Exam

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16
 MACRoECONOMICs
Sect:on Ⅱ
Time-Tθ
60

EⅡ rectioⅡ s:Each ofthe questions or incomplote statcm five suggcsted answcrs or

comp1etions,Sclect the onc thatis bcstin each case ng oval on thc answer shect。

1, Economic gro、 vth is best denned as of one nation’ s cutency expressed

teIⅡ Is of another nation’ s cuJenCy is called
(A) a reduction in thc infant rnortahty
(B) a decrease in the unemployment rate (A) the wOrld phce
(C) an increase in the labor forCe participaˉ (B) the exchange rate

⑼⑻
tion rate (C) thc1aw of one price
(D) a short亠 run increasc in gross domcstic teΙ ⅡΙ
s of trade
product withou住 innation purchasing-power parity
(E) a sust茁 ned increase in reaI gross domestic
prQduct per capita

CounLy X COunLy Y
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RAD【 os 20
RADIOS

3. Using cqual a卩 ounts oflabor hours,CounLy X and CountFγ Y can cach produce the number of watches and
radios shoWn in the production possibⅡ ities curves aboVe.Based on the infoI"iation,、 vhich of the follo、 ving
芯 tme?
(A)CountFt/X has an absolute adVantage in the producton of both watchcs and rados and a comparative
advantage in the production of watGhes,
(B)C0untγ Y has an absolute advantage in the production of both watchcs a【 ld radios and a comp盯 蔽ive
advantage in the produGtion of radios.
(C)Countr怡 s X and Y can engagein a mutu/ally advantageous trade by exchanging1watch for1radio
(D)Country Y is willing to give up2watches ih exchange for I radio from COuntry X・
(E)Counuy X is wi11ing lo give up2radios in exchange fQr1watch from Country Y.

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17
 4. 1f a worker’ s nomin五 l wage rate increases f⒑ m 8, J叹 gg扌 εgate demand may be measured by adding
$10to$12per hour and atthe same tiIη e the
(A)GOnsump‘ on,investment,saving§ ,and
gcneral priGe level lncreases by IO perGent,the
imports
wOrker’ s real wagc has
(B) savings,gov⒃ ment spending,and
(A)approximately decreased by10% business inventories
(B)approximately decreased by20% (C)consumption,hvestment,goVemment
(C)Δ pproximate1y inGrcased by I0% spending,and net exports
CD)appro疝 m菠 dy hcreased by⒛ % (D)domest忆 private expenditures and
(E) not Ghanged govemment spending
(E) domestiG expenditures and iⅢ ports
5. 、、冫
hich of the foIloxving is an example of fIocal
policy? 9‘ According to the short¨ run PhⅡ lips cunJc,a
decrease in unemploymentis eXpected to be
(A)Increasing govemment eXpenditures to build
accompan1ed by
high、 ˇays
(B) Increa“ ng the money supply to increase (A)higher laborˉ forGe parucipati0n
lnCome (B) an increase in innati。 n
(C)Decreasing the discount rate to lower (C) an incrcase in the produG“ vity of capital
unemployment and innati。 n (D)an incrcase in the g° vcmment de伍 Git
(D)Decre箔 ing the feder/dl funds rate to stimulrdte (E)a decrcase in real莎 oss domestic produd
investment
(E)Decreasing the reserve ratio to increasc bank lθ 。If labor costs-se in thc automobne industrγ ,

rcserVes wh妃 h ofthc foⅡ owing wⅡ I卜 appen to car pHccs

and the quantity of cars sold?
6. Thc Federa11Rescrvc can Gause an increase in
Ⅱ ce Ouantitv sold
interest rates in an attempt to
(A)Decrcasc Decreasc
(A)reduGe innati0n
(B)Decreasc 1ncrcase
(B)reduce cyclical unemployment
(C)Incre“ e DeGre贫 se
(C)reduce stmctural unemp|oyment
(D)InCre“ e 1ncrease
(D)increase aggrcgate demand
(E)InCre灬 e Not Change
(E)increase investment spen曲 ng

11.The annualinnauon rate is expected to be

7, The valuc of which ofthe foHowing is GOunted in
5perGent over the next3years.Juan plans to
the【 Jnited States gross domest∶ c product?
take out a3-yearloan to purchase an automobi】 e.
(A)Clean alr If Juan decides notto take0ut thc loan if the rcal
(B)Child Gare a father provides for hs ch11d interest rate excecds3percent,the highest
(C)An automobile produGed in Sweden by a nominalinterest rate he is、 ˇ
illing to pay is
United States irm
(A) 2percent
(D)A car produced in tlte Unikcd states and sold
(B) 3percent
in Europe
(C〉 8perccnt
(E) V√ IediGal scrvices not provided due to
(D)15percent
preventative health care
(E)25percent

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18
12.Vˇ hich ofthe folIowihg is tme about the卩 ationaI
debt of the lJnited states?
(A)It i⒍ the dcbt owed fo fore璁 n inves￡ ()rs。
(B)I迮 is the accum刂 Iation of past and GuⅡ cnt
budget dencits and surpluses。
(C)It incrcas° s when gross domest⒗ product
increases.
(D)It increases when eXports decrea鸵 ,and
decreases when exports increθ se.
(E)It d记 not e疝 st before1980,
I3.Which ofthe foⅡ o、 ving Fnost uhdermines the
a。 nityofanationtscuFenCytostoreValue?
(A)A de” crease ln the purchasing power ofthe
Cu订enCy
(B)The use of Crcdit and dcbit Cards as
med1ums of exchange
(C)An inc碍 asc in the poces of fedcral bonds
(D)Appreciaton ofthe Cu玎 enCy in tlle
intemational money market
(E)An increase in the supply of Forcign
cuσ encies in the int⑾ ational Fnoney
market
14.Assume that the innati。 n rate in County X is
veW hlgh relativε to the innati。 n rates in aⅡ ofits
trading panners.WhiCh ρfthe fo1lo、 ving is Iikoly
to happen to CountW X’ s⑶ 盯enCy on” e forelgn
cxchango market?
(A)The demand cu卩 e for山 e curenCy WiIl shin
to the吐 ght,and the cu玎 en哕 Wˉ 11
appreclate.
(受3)The-e犰 and cuwe forthe curency wiIl shift
ko tlle始 钆,and the cuσ enc,J will depreoatc,
(C)The suppIy curve forthe cu盯 enCy will shiR
to the Ieft,and the cuⅡ ency、 vill appreciate.
(D)The supply cuwe forthe cuΠ ency w⒒ 1shiR
to the Ieft,and the cuσ enCy、 vi】 l depreciatc,
(E) Therc wnl be no shin in the demand curve
forthe cuⅡ enCy,butthe cuⅡ ency will
dcpreciate^
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any pa"of th,β 卩θ gθ :ε
15.Comparative advantagc imphes that
(A)no country s五 ould spcoalize completely
in thc production of any one good
(B)every cOuntFy should tγ to eXport more
tllan it imports
(C) deˇ eloping countries should import raw
materiaIs and export manufactured goods
(D)two countr⒗ s should bcnefit from trade
un1ess both haVe equal opportunity costs
in every good
(【:)cθ untries should impose tariffs to protect
the1r domestic1ndustr】 es
16.If the velocity of rnoney is stable,the quantity
theory of rnoney predicts that an increasc in
the而 oney supply wiIl lead to a proponionaI
(A)increase in thc nominal output
(B)decrease h the pⅡ ce level
(C)decrcase in tlle nominal intcre哎 ratc
(D)decrease in the rcaI interest rate
(I:;)decrease in the unemployment rate
17.The diagram below sho、 /s a linear production
possibih‘ cs curve for a counoy.
m∩
08
∞
100∞ oD A
Ifthc cconomy ls cu盯 Cnt1y producing Iθ units of
good A a卩 d90units of good B,thc Opportun1ty
Cost ofinCrcasing the produCtion of good A from
10units to20units is how many units of good B?
(A) 0.5
(B) I
(C) 5
(D)IO
(E)20
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1θ
 23.VVhich ofthe fo"o、 ving actions by the
Federal Rescrve reduces tbe abⅡ ity of the
banking system1o crcate moncy?
:tenn18Was not scored。 (A)Decreasing thc federal funds rate
(B)Decre钆 ing thc disGOunt rate
(C) Increasing the moncy supply
(D)InCreasing￡ he rescWe rcquirement
(E)Buying govclmmcnL bonds on仁 hC opcn
market

24.An incrcase in thG intemational vaIue of the

19.WhiGh of thc following is rnost likely to occur
United Statcs dol1ar、vnltend t。 cause
whcn the Fcdcral RcscrVe buys govcmment
bonds on thc opcn1narkct? (A)UnitCd S忸 tcs eXpo砭 s to fall
(B)thC natiQnal income of tllc United Statcs to
(^)The demand for money will deGreasc.
increasc
(B〉 The government’ s debt wi11decrcase.
(C)Interest ratcs Wm dcGrcasc.
(C)cmploymeΠ tin thc manufactuong sector of
(D)ThC discount rate Wm incrcase。 the Unitcd S皈 tes to increase
(D)the innat。 n Fatc h thc United statcs to
(E)Investmcnt demand wiII dccrcasc.
incrcasc
(E)the growth rate ofthc Unitcd statcs cρ onomy
20.An industry historically uscd cmployees
to lncrcase
、vith speci∏ c skⅡ ls If this industry experienccs
teGhnological advanccs that requirc nc、 v ski11s,
25.VVhich of thc follo、ving statemcnts about the
therc wilI mostlikely be
simple circular a。 wm。 dcl of a market ccρ nomy
(A)cyCh∞ l uncmployment is coⅡ cct?
(B)frictional unemploymcnt
(A)Houscholds arc On the demand sidc ofthe
(C)sCason耐 unemploymcnt
producⅠ rIlarket ahd the supply side of Lhe
(D)stmctural uncmployment
(E) no change in uncmploymcnt resource m8Fkct.
(B) Business伍 ∏ns are on the supply side of both
21,1f rnarginal business taX rates are decreascd,ho、 v
∶
the p「 oduct rn(:;∶ 【
kct and the rcsource Inarket、
(C)Households recoVe income in the fom of
、
viⅡ aggrcgate supply and employme沦 t Change
、ˇages,and business H唧 s receive inconte in
in the long lun?
the1丨 iom ofinvest1nent.
蚺 蛐 咖 (D)Expo砭 s and inv。 stment expenditures are
(A)Increasc cxamplcs0f leakage frorn the circu1ar f【 o、 v,
Increase
(B)Incrcasc whereas impolts ahd saVings afe1nJections
Decreasc
(C)Decrease (E)CiEul盯 n。 wm。 dels arc used p“ mε ily to
1ncrease u∶

(D)Decrease explain why moncy is nocessa【 y in any

Decrease
(E)Not change 1ncrcase
econoΠ11c system.

22,XX/hich of the follo1ving would causc thc ofⅡ cial

26,Which° f thc foI】 o“
`ing governmcnt policies can
rcduce thc ratc of innati。 n in the short run?
unemp丨 oyment mtc to understate the plobIem
of unemployment? (A)Providing investment tax credi“ for
(A)Ⅵ′
orkers reCeiving unemployment buslnesses
compensatton (B)RCducinε pcrsond income tax rates
(B)Cyclically uncmployed workers (C)SeIIing bonds on the open F下 1arket
(C)Discouraged workers (D)Decrcasing the reserve rcquiremcnt
(D)Reccnt coIlege graduates looking for work (E)Decreasing the discount rate
(E) Redrees

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20
27.Crowding out occurs`Ⅳ hen 30.If an cffective p“ ce nooris rcm。 ved from a
market for a good,ulen曲 e pnce and quantity
(A) increases i】 lgovemment spending bccome
ofthe good soId wi1l changc in、 vhich of thc
ineffcctivc becausc tax rcvenuε s incrcase as following ways?
iΠ come incrcases
(B) govcrnmcnt botovong to f1nancc its P。 ce Ouantitv
spending decreases ofivete sector (A) Increase Inorease
investment (B) Increase Dccrease
(C) monetaγ po⒒ cy actions dccrease the effec¨ (C) Dcc「 ease 1ncrcase
tivcness0ff【 scal po⒒ cy (D) Dccreasc Decrease
lD) rCstrictive1uonct缸 γpollcy causes the intcrest (E) Noc-ange Increase
rate to increase
(E) govemment spending and private scctor 3I.VVllen the Federal Rescrve inCrcases the
spending increase by thc same percentˉ money suppIy to stimu1。 。 tc aε g1|(9gate dcmand,
age rate wofkers belicve that this action、〃nl cause lnna~
tion in the future and ask for higher wages to
28.Which of the folloⅥ offset the expected increase1n1nnatlon,This
`ing is true of a hoozontal
aggrcgate supply curVe’ is an example of
(A) It is the usual assumption】 nade by c】 assical (A)adapt"e expect犁】
ons
econon1ists arlalyzing the long mn。 (B) ra‘ onal expectations
(B) 【
t suggests that inGreases in output can occur (C)the Ⅴelocity of money
without incrcases in pHce leveIs。 (D)曲 e real balance effect
(C)It suggests tllat a s"ft in拙 aggregate demand (E)曲 e money multiplier
curve willlead to a change in dle p洫 1evel,
(D)It is likely to occur onIy in h璁 hly indus旺 alˉ
32.Which ofthe fo⒒ owing would be ihcIuded as a
1zed econoΠ lIcs.
habnity on a commcrcial bank)s balance sheet?
(E)It cannot shi丘 ,therefore output rem珏 ns
constant. (A)Consumerloans
(B)Demand deposits
29.Which ofthe foI∶ owing individuals is0lassi伍 ed as (C)Net wonh
unemployed? (D)Bank reseΠ cs
(E)Treasury bonds
(A)A flfteen-yeaF-old high school sttldcnt Who灬
loo⒗ ng for a babysitting Job
(B〉 A laid咱 ff oompu!er programmρ r who h嚣
ghen up looking for a newjoo
(C) A parent whO WOrks in an afte⒈ school day
care center fQr15hours a Week
(D)A recent co1lcge graduate who∶ s loo⒗ ng for
her f】 rstjob
(E) A mayo亡 who Iost an electon and retired

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 33,xul⒗ Ⅱofthe fo1lowing statements bes∶ d∝ cHb∞
dle IrnpaGt of a decrcase ln Japanese【 nco耻 on
aggregate demand in the【 Jnited Statcs?
(A)There wⅡ l be no change in aggfegate demand
because1Jnited States aggregate demand
deponds only oo the income of1Jnited
States consumers.
(B)Aggregate demand wⅡ I decre灬 e bccausc the
demand for1Jn1ted states exports decreases.
(C〉 Aggregate demand wilI decrease because tlle
value ofthe【 Jnited S:atcs doIlar decreases
relative to the Japanese yen。
(D)Aggregate demand wⅢ horease because
a decrease in income in Japan causes an
Increase1n lncome:n the1Jn1ted States,
(E)Aggregate demand willihcrease because
lnterest rates1n thc1Jn1ted states decrease,
34.suppose thatthe Federal Reserve is comn1itted
to keep∶ ng the noⅡ un^l interest rate「 xed.To
【
maint菠 n dle hterest rate taFgetin the f・ ace° f an
expansionary nscal policy,φ e Federal Rcserve
can do which ofthe following?
(A)1ncr。 ase山 e pome rate
(B)Increase dlc由 scount rate
(C)Increase曲 e federal funds rate
(D)Engage h open-m盯 ket purchases
(E)Engage“ open-market业 leo
35.Which ofthe following is位 ve Ofthe quantity of
money demanded?
(A)It Fi够 s when interest rates Λse,because the
retum froΠ 【hoIding money increases‘
(B)I佼 falls when in⒃ rest rates risc,because the
opportunity cost of holding Fnoney
increases,
(C)1t remains constant whcn intcrest rates戒 se,
as long as innation rcmains Constant.
(D)It rises when interest rates rise,ao long as
innati。 n is deGhning.
(E)It%lls whcn Rhc moncy supply hcreases,
as long as in臼 ation remains constant.
C。 pyIng or reuso。 I
any ρ臼n0fthIg ρ日ge l令 lllθ gal
22
36.、Vhich of the following、 ″ould be a cuⅡ ent
account transacu。 n?
(A)1ndh buys$IO bⅡ Ⅱon of new United states
Treasury bonds,
(B)A United statcs fllIIl buys5percent of the
stoCk of another United states Gm.
(C)A United states nrm builds a ne切 factory
ln Kenya.
(D)A United states f1rFn seIIs$500mⅡ Iion of
⒒s products to a Chinesc company.
(E) The unitε d States buys$8bⅡ lioh worth of
euros,
37.Which ofthe following wⅢ most hkely ocρ urif a
go妮 mment adop0s an annuall,,b扭 anced budget
mle that requires thc govemmentto eli田 注nate any
deflcits or surpluscs?
(A)Unemployment wi1l be elir沌 nated and pr1ces
wⅡ l be stable^
(B)勹 №e nadonal debt Will increase。
(￠ )Bushess cydes wⅢ becomo more stable.
(D)1`e automatic stauh犭 ng effect of nsGal
poI℃ y wm bε ellmi古 ated,
(E)The govemmont Will be fo亡 Ced b spend less
when thcre are surpIuses,
38,Which ofthe foIIowing changcs would cause
an economy’ s aggregate demand curve to shift
t。 ule nght?
(A)An incrca晖 ln spending on imports
(B)An incre邓 c ih aut。 nomo谊 s∞ nsu而 ption
spepding
(Q An increase h intere虬 rat∝
(D〉 A dqcrease in the money supply
(E)Ad。 crease in the ovcrall price lev。 l汛 t11e
eConomy
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39,1n the measurcment of gross domestic product, 42,Which ofthe foIIOwing、 vou1d best eXpl茁 n an
i卩 vestment inCludcs spending by inward shin。 f the production possibilities curve?

(A) businesses on capital goods and changes in (A)An incr∞ se in the labor-force″ 喊忆ip⒊
inventories
(B) businesses on st0Cks,bonds,and other (B)An increase in the ratc of savings
flnancial assets (C) A decreasc in the quanuty of inputs rcquircd
(C)individual households on st∝ ks,bonds,and to produce a unit of output
other nnancial assets (D)A decrease in the quality of human capital
(D)the fedcrFdl govemmentto purhase bonds (E)A decrease in the goVemment’ s budget
issucd by the Federal Rcserve dcflcit that lcads to1oWer real intcrcζ t rates
(E) the Federal Reserve to buy goVcrnmcnt boRds
43,Assumc thatthe economy is in equniboum,1f
40.lVhich ofthe following statements concen1ing aggregate demand increases,nominal interest
economic gro、 Ψth ls true? rates and bond prices will rnostlikely chahge in
which ofthe foⅡ owing ways?
(A)If thC population is growing faster than potcn¨
tial output,reaI gross domcstic product per Nominal Intcrcst Ratcs Bond Phces
capita wⅢ Ⅱnnitely increase. (A)InCrease Increase
(B)With long-mn econom℃ growth,there is an (B) 1ncrease Decrease
increase in aggregate supply.
(C)1ncre嚣 e Not change
(C)The gap between o￠ h and poor must Widen
(D)Decrease Increase
with longˉ mn ecOROm⒗ g⒑wth. (E)Decfe灬 e Decrease
(D)Increasing pote虻 ial output nec铩 s盯ily
increases the economic、velfare of the
囚
-4.
⒒飞忆h of由 e following would mosk likely
averagc c1t1zcn,
stimulate eGOnom沁 growth?
(E) Long△ vn economiC growth is only possible
with demand management poliC汜 s. (A)Decreased sa毗 ngs
(B)Decreased wages
4I.Ifthe economy was in a seVerc recession,the (C)Increased transfcr payments
most eXpansionaη (D)1ncreased personal income taxes
`flsGd policy would be tO (E) Technological progress
(A)dec℃ ase both person怼 incomρ taxes and
govemmξ 讠
nt spending by θqua1aFYlounts
(B)decrca⒃ both tbe re茈 rve requi光 ment and
gov0mmentspending by the same
propoH1on
(C)dCcrcase p∝ son・alincome伐Ⅸcs and incrc灬 e
govcmmentspending by equa1amounts
(D)increase the money supply and increase
govcmment spending by thc samc
proponlon
(E)increasc soCial security taxes and increasc
govemmcntspending by cqual amounts

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23
 45, F a French flt【 n buys cOmputcrs from the Unitcd i叩 u⒃ wm causc
States,therc Would be an increase in which ofthe iⅡ the shon mn?
fol1oWlng in the foreign exchange Fnarkct?

(A)DCmand for United States dollars and

硼 1he aggregate deη and and an
in thc price leveI

d
of euros in the aggregate demand and an
(B)DCmand for both United States dollars a incrcase in the poce level
euros (C)An incrcase in thc short-mn aggrcgate suppIy
(C)Supply of U砣 ted States dollars and demand and a dccrease in the pricc lcvel
for euros (D)An increase in the short-mn aggregate supply
(D)Supply of both United Smtes dollars and and an increase in thc price level
curos (E) A decrease in the short-run aggregate supply
(E) 1n1Cmational value of thc curo relative to thc and a decrease in迕 he ρrice levcl
United Sta怡 s doIlar
49.Vˇ hich of thc folloˇ
46^Ifthe FederaI Reserve pursues a contractionaFy capital?
`ing best descHbes human
monct￡ Fy poⅡ cy,output and the pnce lcvel wiⅡ
(A)The number of workeΓ s in the labor force
change in which of the following ways in the
(B)The physical caPital used by wor】 cers
shon mn?
(C)The fInahoal asscts oWncd by wOrkers
蛔 Ⅱ ce⒒ vel (D)The t茁 ning and education of workers
(A)1ncre猫 e ncrease
【 (E) The spending by busineζ s for worker
(B)Increase No change recmItment
(C)InGrease Decrease
(D)Decrease Decrease 50.V旷 hich of the foⅡ owing is an eXample offoreign
(E)Decreasc 1ncrease direct invcstrnent?

(A)A United states automobilc manufacturer

47.1f thc nominal gross domestic product(GDP)
ofthc nat1on ofI1ypo丈 hctICa【 nCreased in2007
relative to the previous yca△ it rnust be true that
in Hypothetica in2007
(A) both the poce Ievel and the real GDP havc
【ncreased
(B) neither the pHce level nor thc rcal CJDP has
1ncreased
(C) the price level increased by a larger
percentage than did the real C;【 :)P
(D)the poce levelincreased by a sma1Ier
percentage than did the reaI C:DP
(E)the price lcvel and/orthe real GDP has
ncreased
】 unempIoyment and innati。
buⅡ ding a steel plantin Russia
(B)A United States citizen Purchasing
Corporate bonds issued by a French
manufactuong fm
(C)AM谀 ic容 n ciuzeh purchasing V“ ted孰 ates
Treasury bⅢ s -
(D)The Fede吨 l Reserve purcha∮ ng Japanese ycn
(E)Immigrant workers in the Uhited S忸 t。 s
∞nd” gm。 ney to thek natiVe count,
51.Which of the follov`ing is true ofthe long~run
Philhps curve?
(A)It shows there is a trade~off between
n.
(B) It is pos⒒ iveIy slopcd JⅣ hen the innati。 n
rate cXceeds the unemployment rate.
(C) It is vertical at the natural rate of
unen1ployment.
(D)1t shifts to the right if aggregate demand
increases.
(E) 1tis created by an adverse supplyshock,

Vnauth° rreuse of
日0y,art°
"=ed
fthlεoopyIng°
p密 ge Ig Illε
G0oN TO THE NEXT PAGE.
gaI。

2唣
52,Gross domestic product has bcen cHticizcd 54ˇ EXpansion呷 monctary poⅡ 。y Gan affect thc
as a measurc of wdlˉ b|ng because⒒ 弘ils economy through、 ving chains
`hich ofthc foHo、
to takc into acGOunt whiGh° f thc following? of events?

(A)The distobution ofincOme (A)1ncreasing the di陇 ount ratc lowers the real
(B)The value of services interest rate,Wh℃ h raiscs investmcnt.
(C)Thc valuc of intermediate goods (卩 )Reducing taxes lowcrs thc discount rate,
(D)The valuc of「 【nancial Cansactions vvhich raises consumptio∏ ,

and sales of uscd items (c)Incrcasing govemment expenditure lowers

(E)The value of govemment∞ rv汜 es the intercst ratc,whiCh raises investmcnt.
(D)Inσ casing thc rescrVc requi「 emen廴 d∞ re“ es
由e intcrcst ratc,whiGh increases
●
m>叫

invcst【 ncnt.
(ε ) Buying bonds incrcases the【 noney supply,
凵 凵 0υ μ

which Iowers the interesC rate,

宀

55.If the「eal interest rates in the Unitcd states ose

relative to ratcs in other couhtHes,what、 冫
`i1l
P2 happen to ule intemational value of the IJnited
states dollar and IJnitcd states net expo五 s?
P1 Value of the Dollar 蜘
(A)Depreciate Increase
(B)Depreciatc Decrease
(C)Depreciate `No Ghange
(D)Appreciatc Decrcase
(E)Appreciate 1nGrcase
53.The gr岔 ph abovc sho巾 s thc Fnacroeconomic
J7attsonia。 Many eConomists
、
conditions of i、 冫 56.VVhich of Ihe following changes wi⒒ have ule
estimatc Lhat the natural rate of unomp1oymcnt smallest expansionan`effect on aggregate demand
is6perccnt.If ulis is Luc ap,d the curcnt ratc of ln the short mn?
unemploymcntis5.1percent,in、 Vhat range of
(A)An incrcase in cXports of$lC×
real gross domestic productis the economy l

(B)An increase in govemmentspε nding of$100

currcntIy pFoducing?
(C)A decrease in taxes of$100
(A)L。 ess than YI (D)A decrease in impons ofsIC)(亠
(B)At Υ l
(E) A dccrcase in savings of$1∞
(C)At Y2
(D)Grcatcr than Y】 and1ess than Y2
(E)Gneater than Y2

VnEluthorIzed ooPyIng or re刂 so o饣 加

any part ofthIs p日 ge lg lllegtlL
G0oN TO THE NEXT PAGE∶ 营

25:
 dμ >臼
57.A leftward shift of uhe long-run aggregate suppIy
curve is most Iikely consistcn住 with an

凵 ㈣ 0口 ι
i1η provementin a cOunLy’ s standard of living if
(A)p。 ces fa11
(B) depreciation increases
(C)population deGreascs
〈D)taxes deGrease
(E)impo】 ts decline

58.stagnat1。 n1s Gauscd by

(A)an increase in imports
(B)an incrcasc ih aggregatc dcmand
(C)a decrcase in aggregate dcmand
(D)a dCcrcasc in aggregatc suppl,j
(E) an increase in aggregate supply
59.The rcqulred rcscn,e ratIO Is0,2and the
FcdcmI Reserve sclls$1million in sccuot抬 s,
1ftherc arc no leakagcs and banks do not hold
excess rcserves,then which ofthe fo1lowing
is the Ghange ln dle moncy supply?
(A)AΠ hc⒑ ase of$1million
(B)An1ncrease of$1.2miIlion
(C)An increasc of$5miI1on
(D)A decrease of s1,2million
(E)A deGrease of$5million
EsT1C PRODUCT
GR0ss Do如 哎
60.Thc economy of a cOuntry is cu弼 ntly in
cq匝 lib冖 um atpont A in曲 e dagram aboⅤ e^
Ifthe govemment does nothing and wages arc
nexible,which ofthe fo⒒ owing wnl most⒒ kcIy
occurin thelong mn?
(A)Falling wages wiIl shiR thc aggregate dematld
curve to thc oght,producing fuⅡ
employment,
(B)Rising wagcs wi】 l shift Lhe aggregate dcmand
curve to the Aght,produGing】 i11ll
‘
employmcnt。
(C)The eGonomy wiIl rem百 n atpont A.
(D)Rising wagcs wi1I shift山 e aggregate supply
curVe to the right,producing ftlll
employment.
(D Fa11hg wagcs will s“ R曲 e aggFeg五 te suoply
curvc to∷ 刂
:Il1C Hght,producing fun
cmPloym0nt,

臣ND0F sECT丨 oNI

FYOU
∶ F!N:sH BEFORE TIMEIs CALLED,Υ oV MAΥ
CHECκ ΥouR、″oRK ON THIs sECTION。

DO NOT Go oN丁 0sECTlON ll uNtIL You ARE T0LD T0DO so.

VI1authoHzθ d oopy∶ og° r reuso。 f

any ρa"° f1h∶ s pagθ lB Illθ ga丨

26
 咖

APΘ MacroeconoⅡ ⒒cs EXam

s嚣 CTION【 I:F亡 eeˉ Responge Ouegt二 o⒒ ε 2010
00Ⅱ OT BR￡ Aκ tHE sE^10m tH1s BO0κ LET uⅡ tI1VOu AR￡ TO凵 DtO卩 O sO.

tO:a,△ me PLEAsE PRlNT、 VlTH PEN:

1hour
Ⅱum1ε r of auesti。 Ⅱs
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猢昆 滠钒打 r￡ :尾:涂
3 First丨 etter of yOurfirst namθ reρ roducθ ‘and publish my frε εr̈e阝 ponse
P母 rCε Ⅱt oftotaI sε orε
materials`both W"仗8n and ofa1fOr
ed刂 cationalresearch and instrucu。 na|
33.3% mv
W"刂 ng:m嵌 rume"】
Pen With bIack or dark 曰
Month
□
Dnˇ
|||
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罗l:∶ ∶ ;l∶ i只 恣:泔:惑il‰η 满 砾
connBction With my free¨ response
b丨 ue ink
matedaIs,I undgrst8nd thatl am free to
sixⅡ dig讨 school εode
mark° No” with mo e仃 θct On my scorε or

||||l m时 惋 ε№
its rθ p° rting

删□
TImθ
10minutes。 Usθ this 淑:癯卩 卩 c° llθ

tirne to read the

qLI9s刂 °ns and plan Your

淡
answers.
In8truotiong

Question1
s廿 g¤ e歃8d Timθ 鞯弋
搬谗凫 谳f瑙擀
撅韫盛￥ 甓
槭骅 罾
25rr1inutes

髁槲
Pε rcθ mt of sθ c刂 o“ ll sco「 e
50°/。
T箩
Question2
s设 g日 ¤救ad△ mθ
12^5minutes Whte dear圩 and leg山 V Numb∝ Cach answer as thc qucst】 on“ numbered h thc exaIn
pθ rGθ 珉t。 f$θ C】 ig妞 :1sG¤
Begln the ans巾 er to each ques硅 on on a neW page.Do not skp unes cross out any e汀 0rs
re
25% you m臼 d(e∶ crossed-out work、 、诬 not be scorcd-

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You
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s姆 霸gε 获ed Ⅱitle
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1劈;lF∶ 磊 l:昌:;∶ 1早 :ff背 :j∶ J:f∶ r・

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P彦 r畲 θmt of sec】 iom:I score
25%

27
 VΙ ACRoECoNOMICS
' sect∶ θn II

PIanning1Ⅱ me-ˉ 101n∶ nutes

VVriting TIme-ˉ 501niⅡ utes

D沁 ectons:You have50minutcs to answer all three ofthe following questo灬 .Π 1s su￡ ￡ested that Vou sDend
n￡ time eσ uaI1Ⅴ betxvecn tho~nexttwo
囵卫鱼型山9⒐ ⒉In aoswe。 ng the questons,you should cmPhasize the⒒ n。 of reasoning that goncrated your results∶ lt is
not enough to list the results of your analysis.Include coFecuy labcled diagrams,if uscfuI or rcquircd,in cxpIaining
your ans、 vcrs,A CorectIy Iabcled diagranl rnust have all a【 es and curves clearly【 abeled and must show direGtiρ naI
cllang钥 .

1, Assumρ thatthe1Jnited states economy is currendy in long-run equilibrium,

(ω Draw a coΠ cctly labeI田 gr即h of魄 g⒑ga⒑ deman￠ and aggrega佗 mpply⒛ d show each of曲 e follo诫 ng.

(i)The long” mn agg「egate supply curvc

(ii)The cu玎 ent equiliboum output and PⅡce levels,labeled as YE and PLD respectively

tb)Assume thattbe govemment hcreⅡ es spending on natonal defense without raising taxes.
σ)on your莎 aph in paH(al,show how the govemment action affec‘ aggregate demand.
(ii) How wnIth。 govemment action affectthe unemPloyment rate in the short mn?Ekplain.
(c)A$umc thatthe ecOnomy a曲 usts to a neW long-mn cqui1山 rium aner曲 c increase in govemment sPcn山 ng,
(i)How wm thesh。 rt-mn aggregate s刂 pply GBrvein the new long-mn equilibHum comparc wi由 th蔽 in
the initial Iongˉ run equi1iboum in part(a)?Explain.
(Ii) on your graph in paH(a),labelthe new1ong-run equilibr讠 un1Pocc lcvel as PL2,

(d) In order to flnance the increase in govemment spending on national defense fΓ om part(b),thε goˇ em” eDt
borIoψ s funds from thε pubhc.Using a GoⅡ ecdy labeIed graph oftho loanablc funds markct,show the effect
ofthe govcmmcnt’ s bo汀 0Wing on the real intcrcst rate。
(e) Given the changc in the real interest rate in part(d),whatis the impact on each ofthc following?

σ)Investment
(ii) Econom忆 groWth rate.ExpIain.

2. A drop in credit card fees causes people to use credit cards more often for transactions and demand lcss money.

(a) Using a coⅡ ectly labeled graph ofthe money marke攵 ,show hOw the nominal interest ratc will be affected.

(b) C冫 iven the intcrest ratc change in pa1i(a),、 vhatˇ ǐll happen to bond priccs in the short run?

(c) Given the intercst rate change in pan(a),what wnl happen to the price levelin the short run?ExpIain.

(d)IdCntify an open-market oper挝 ion the Federal Reservc cou1d use to kccp the no” inal interest mtc co灬 tant
敛the level” at Cxisted beFore the drop in crcd1t card fces.Expl威 n.

Go oN To THE NEXT PAGE。

28
3,A Unitcd Statcs nrm seI1s$10mi11ion wOdh of goodsto a Rm in Argcntina,whcrc thc cuJency is由 ep。 so。

(a)How Willthe臼 ansaction above affect Argentina’ s aggregate de甲 and?E义 pIain.

(b)Assume that the United Statcs curent account balance with Argentina is initially zero。 How wilI曲 e
transaCtion above affect the lJnited States cuFent acco1nt balance?Exp1ain,

fc〉 Using a correctly labeled graph of the foreign exchange market for the United Stat钥 dollar,show how
a decrease in the、 Jnited States f1nancia1invcstment in Argentina affects e8ch ofthe following‘

(i)The supply ofUnited states dolla心

(ii)The value of the United states dollar rclative to the peso

(d) suppose thatthe inna吐 on rate is3percent in thc1Jnited States and5percent in Argentina,V、 rhat will happcn
to the value9f the peso rclativc to the United states dollar as a result of the difference in inRatlon rates?
Explain,

sTOp
END OF EXAm

29
Chapter H11:Ans下 Ⅳers tO the2010
AP MacrOecOnOΠ 11cs Exam
Section I:Ⅳ IultiPle Choice soσ 咬om1:呶 ultiole Choice
・ Section I Answer Key and Percent AnsbFerin宫
L、 ted beloW are the correct answers to the multiIPle-chocc
Correctly qucstions,the percent ofAP students who answcred each
口 /`nalyzing Your studentζ Performance on the
question correctl,Pby AP score,and the tot甜 perce11t
lvIultiple-Choice Section al【 sWering correctl≯
。 Diagnostic Gulde for the201o AP
MacroeconoΠ lics ExaFn
section I⒈ Free Response
。 Comments from the ChiefReadcr
□ Scor∶ ng Guidelines,sample Student Responses and
Commentary

secti0n I Anmer KOy and Percent AⅡ swering Corrρ ctIy

獭⒗

Pθ cθ nt CoFo吱 by scoro TOtal Pθ :oθ n饣 Cooθ ct by scor8 Tbta1

Itθ m Conrθ ct
R。
Correct
Pθ rcθ nt Pθ rcθ nt
Wo。 AnεWθ F r、 n:wθ r
5 4 2 : C0忄 θ悦 5 4 2 1 CoⅡ θct
1 E 94 91 88 84 71 84 26 C 81 73 66 57 37 60
●`
0白

2 B 100 99 98 97 90 96 B 97 86 69 52 26 62

空υ
9乙
3 C 97 91 87 83 69 83 28 B 96 87 77 32 67
4 C 93 81 71 61 44 67 29 D 97 90 83 % 48 75
5 A 99 94 83 69 38 73 30 C 67 53 锣 42 31 z∶
5
6 A 97 85 72 63 52 71 31 B 76 58 46 37 25 45
◇‘
00

7 D 97 91 85 79 66 82 B 71 46 32 22 13 34
'q
8 C 98 91 83 75 59 79 33 B 95 83 72 63 67
9 B 100 97 90 78 43 77 34 D 58 35 31 29 19 32
10 C 98 95 91 88 78 89 35 B 75 56 45 39 30 46
C 93 飞 55 39 24 53 36 D 72 44 29 21 17 33
空
0‘

0乙

B 86 扭 67 61 54 66 37 D 43 36 32 36
°°
0乙

13 A 86 73 64 57 38 60 38 B 95 66 49 27 60
14 B 73 63 61 60 四 59 39 A 95 83 69 54 27 61
b
一

D 99 97 94 89 68 87 40 B 88 70 5饣 妊6 32 55
,一

16 A 70 42 29 17 33 妊1 C 91 87 79 66 36 68
17 D 96 90 8砝 77 56 78 42 D 96 84 69 54 25 61
18☆ 43 B 35 18 15 14 15 18
∩口

19 C 96 81 62 48 30 60 4媛 E 97 85 8O 56 79
20 D 96 91 8鸽 78 57 78 众5 A 96 87 78 70 4媛 71
,`
0乙

21 A 87 80 75 69 51 70 媛6 D 92 51 36 18 咄9
匚υ

22 C 93 78 66 32 61 47 E 81 54 37 28 19 衽0
°υ
°υ

ρˇ
冱一

ρˇ
nν

’一
∩υ

ρ ˇ
oυ
oˇ

oˇ
0ι

0ˇ

Q一
^ˇ

7・
Qˇ

nˇ

9R 9饫 ρ 67 71
2亻 A 97 87 73 57 29 64 49 D 73 56 46 37 22 43
25 A 91 75 59 46 25 55 50 A 55 37 30 27 22 32
勹 1hough60rnul1iple-choice ltems were administered in Section I,item18 f″ tJε 扌o印
co饣 矽 扌
JI￠ ″e× rpoge
N`s
`】 not usε d in scorIng

31
 sectio】 IAn各 wer Key and percent An$we戚 ng Correctly Fconuhued,

獭
Pθ rcθ nt Corrα 芘△y sσ orθ TOta1 pθ rcθ mt Corroct bΨ s∞ rθ TOta1
Itθ m Corrθ ct Corroct Pθ rcont

w°
pθ rc。 nt
No. An君 W0r AngWθ r

.
5 4 3' 2 1 ¤orrθ ct 4 3 2 1 Corroct

匚
匚

0
36

0
51 C 95 83 66 25 60 56 C 69 34 23 15
52 A 79 ∞ 妊8 36 22 45 田 C 83 59 43 32 19 43
53 E 84 61 迳2 28 41 58 D 95 77 st 33 18 51
54 E 98 87 68 驴 18 59 59 E % 45 25 15 6 29
55 D 91 70 51 37 20 50 60 E 79 46 24 1砭 8 31

Ana1yzing Your student旷 Perfo.Ι ェ

ΙanCe on 3.To∞ mpσ e the student℃ number of ω rrect answers for
tho Mu【 tiploˉ Choice soctio⒒ each section lv【 th the average nunnber correct for that
section,copy the number ofcorrect answers to the
If you give your students the2o1o exan△ for practice,you ‘‘ ’
Number Corrcct’ tab1e at the end ofthe Diagnostic
may飞″ant to analyzc the results to nnd。 verall strengths and
Guide.
weaknesses in their understanding ofAP Macroecon0∏ 1ics,
′
Ihe following diβ gnostic worksheetˇ 碱ll hdp you do tho, In addit廴 on,under each itern,the percent ofAP students
γou are permi仗 ed to photocopy and d“ tr∶ bute⒒ t。 your Rrho answered Correcdy is shown,so students can analyze
哎udents for complet” n. thek performance on ina说 dual ite血 s‘ △诋 hformaton
1. In each section,students should insort a check Fnark for wⅡ1be he1pfulin deciding how students should plan their
each correct answe⒈ study tiFne,Please note that one nem may appearin severa1
diferent categories,as questions can cross over diferent
2.Add togethcr the total number ofcorrect answers for
toPlcs・
each secuon.

32
 c$Exam
E)iagnostic Guide for琵 he20玺 O APⅡ 呕acroe¤ ono皿 宝 、

ECono⒒ ic Growth(Average number correct〓 3(0l

Quest0n# I 40 44 49 57
Correct/Incorrect
Percent ofStudents
Answer叉 ng Correct1y 8亻 55 /, 亻3 《3

Internationa1Trade and Finance(Average number correct=4.7)

Question# 14 2钅 33 36 45 50 55
Correct/Incorrect
Percent ofstudents
Answering CoFrectˇ 96 59 翻 67 33 夕 50
`Ι

Basic Concepts lAverage number correct=4。 dl

Quest0n# 置o 17 30 42
Correct/Incorrect
Percent ofstudcnts
Answering CoⅡ ectly 83 89 87 恕 45 6Ι

Economic MeasureⅢ ents(Av℃ rage number correck=5“ 9

,'
丬△

Quest0n# 4 7 20 22 25 29 39 52
Correct/Incorrect
Percent ofst讧 dents
Ahswering Correct圩 67 彤 刀 6Ι ss /s 6Ι 亻o 亻5

Po1ic≯ In且 at丘 on and UnempIoymcnt(Average number correct=⒎ 4)

’‘

r氵

Question# 9 2I 26 31 34 37 41 46 51
Correct/Incorrect
Percent of students
cJ

Answering CoⅡ ectly /3 77 66 /o 60 亻5 夕 36 68 钅9 60 59

~】 Qmey and Bankihg(Average number correct=4.8)

Question# 6 16 19 32 35 43 59
Correct/Incorrect
Percent ofStudents
Answering Correctlv 7【 “ 60 33 60 乃 3亻 亻6 r8 29

33
E)iag泣 ostiG Guide匿 oF the2010APⅡ 睚acroecoIloⅫ llCs E嚣 色m rconHnued, .

Jl
NatonalIncome Determinatbn lAverage number correcf=4。

'0
8 27 28 38 48 60
Quest0n#
Correct/Incorrect
Percent ofstudents

'0
,'
Answering Correctly /9 j~9 60 /I 4卫 36 3Ι

Ⅱumber Correct
Po⒒ cy,Innad。 n Money NationaI
1ntemaf“ naI
ECon0斑 岐c BasIc Econo“ ⒒c and Income
Trade amd and
GrORr0h Concepts Measurements Banking
Finance UneInploWemt DeterⅡLinatioⅡ

Number of 8 6 9 10 8
Questions

Average 4.4 5.6 7,4 4.8 4.4

3.o 4.7
Number (60,0%) (58.8%) (73.3%) (62.2%) (56.9%) ld8。 0%) ls5,0%)
Correct

My NumbeF
Correct

34
 $eσ 1灵 om Ι1:Free Re$pon窗 e
Comment$froIn the C搬 of Reader
Que$tiou1-— Overview
D舀 vfd⒕ 刀〃ε浴ε″ This queston determined studentζ abili艹 to work vˇ吱h
D印 ￠
″扭gPl扌 orε ε
mo〃 佗s models ofaggregate de:nand-aggregate supPly and loanable
Cg″ Erε CoJJegg f△ nds。Part(al asked students to draw an aggreg￠ e demand~
Df,t” 吨 【g″ fmε夂
/ aggrega呤 supply diagra1I1to shoW an economyin Iongˉ run
eq1】 ilit冫 oum,Part(b)determined whether students k【
lew the
the freeˉ response section ofthe2o1o1夂 P Macrocconomics efFect ofan increase in government spending on aggregate
Exam￠ onsists of three questions:t、 ˇo short¨ answer demand and t!1e unemployment rate,part Cc)tested for
questions and onelong-answer question,and comprises understan由 ng ofˉ the self-a曲 ustment process for aggregate
one third ofthe composite score. suppl)亏 part(d)asked studentsto draw and manVulate a
All free冖 response ques饪 ons a皎 emptto duphcate the graPh ofthe Ioanable funds market,Part(e)req1】 ired
虬 lls and content kno△ vledge rq咖 ed h acdkgeˉ 始vel students to Ⅱenti印
the rdat。 nshp beⅡ屺en red interest
introductory course in inacroeconomics,these questions rates,investment and econo∏ 1ic groxvth.
giˇ e students the opportunity to demonstrate their Ihe rnean score on this question was4.75,alrnost
knowledge and undersε anding ofmacroeconoΠ 1ics 48percent ofthe ma蛀 mum possibIc score of1o points.
princip1es,rnethodology and analyses< Students performed relat加 dy well on parts(a),(b)and
(d),and had the ri10st di路 cult1'诫th the exPlan猁
0n oftIle
s¤ o跛 nσ ¤uide【 inθ 奋,salnp【 e student selfˉ a〈 ijustment ofaggregate supply,in part(cl,and the
Reε P0n臼 θ臼and C° ~entary explanation ofhow the increase in interest rates afects the
The answers presented on the foⅡ ∞岫 g pages are actu茁 economk grolvth rate,in part(e),'
student responses to the打 ee-response questions on the2010 Common omissonsir1cIuded(l)由 scuss⒗ n ofhput
AP Macroecon躏 cs E跏 ,‰ studen凼 gave permi踊 on to
prices dri、 杌g the selfˉ a内 ustment proce$in the aggregO饴
have their work reproduced at the t砥 they took the e跏 .
demand~aggFegate supply rnodek and(2)rnention ofthe
△1ese responses were read and scored by the Table Leaders role ofslower cautal f。 rmat0n as a hnk beMeen higher
interest rates and slower econon“
llF蹴 茗rF:扌 Ⅰ
恝 点莒瑟眢
g山 e c grobTth。

;惶
Teachers should emphasize to students the need to
student responses e盯 ned,as we⒒ as a bnefexPIanation of ullderstand why curvesin graPhs曲 血 the w吖 thγ
do and
why,扩 e in凼 c狨 ed‘ to expIain every steP in a sequence bemeen cause and
efcct.MI:1∶ I∶ lly snIdents seemed to know whatthc graPhs
shotdd Iook Ⅱke but could not convey the reasons for shi⒔ 、
and other changes。 Als0,many students proⅥ dcd
explanations that rnissed key Points.F° r each assertion
、
^/ithin an explanation,students should ask themse1ves if
they have also indicated why that assertion is true.

35
 sCoring Guidθ ⒒nes for Question1

10Points(2十 2十 2十 2十 2)

譬
譬
P玩

PLE

YE REAL GDP

(a)2points:
・ One Point is earned for a correCdy labeled graph~、 |`D cuⅣ e,an upward-slop1ng S鼷 S
'ith a downward-sloping〃
Culr。 :e,and tlle Points P妩 and‰ n” e Ⅶrtical and horizontal欲 ∞
。 .

■ Onc poht沁
`丿

earned for sho呐 ng a vertical LRAs curve at YE。

(b)2Po】 nts:
・One Pointis earned for sh(y1ving a oghtward sh1ft ofthe AD cuⅣ e on the graPh in pa硭 (a).
口 One pomt is earned for stating thatthe unemployment rate would falI and exP1aining that this is because rea1
output increases.

(c) 2Points:
■ One point is earned for stating that the short¨ run aggregate suPply curve、 〃Ⅱl shi盂 to the le盘 and showing PL2
correcdy on the graPh Ln part(a).
。 One Point is earned for exPlaining that the actual price1evelis higher than was expected or that wages and
commodty Pri∝ sa曲 ust to the⒒ gller pri汪 level,catlsh宫 the sRAS curveto sh砍 tothde丘 ,

36
蠲GOr露 琅g Guide1ine$for Quθ st惫 o酗 褒 fcont￡ nued,

宦 囹
卜∞田∝臼卜zH
P乏 叫 rˉ
▲ TIr

Q Q∶ QUANTITY OF
L0ANABLE FUNDs

(d)2points:
扭One point o eamed for a correctl,/labeled graph ofthe loanab】 e funds market.
。 One pointis earned for sho、 ving a r1ghtward shi盘 ofthe demand curve,resulting in a highor1nterest rate(DR a
le§ Ⅱˇ
ard shiR ofthe supply curve,resulting in a higher interest rate.

(e) 2points∶
。 One point is earned for stating that invest1nent spending will de￠ rease.
■ One pointis earned for explaining that the decrease in investment slows down capital formation,leading tQ a
reduction in the econoΠ 1ic gro、~叶 h rate,

37
 samp1e student Re$po¤ ses for Que臼 tiol11
student Re8po浴 se1(soore:8)

&硎 抛 盅_

38
s毛 ude汛 se1rcOnε 由
nued,
`Re$Po血

n+hE闷

柚 柢 臼咖 oJ丫 驯阮涑
11【
灬
Ⅰ℃
:). c。 1「 ,

VⅡ 丨dG。 MsE.

39
studellt Regpo⒒ εe2(s￠ or瞎 :5)

十哧 xn
加

s久 J廴 J

娴
student Response2fconJhued,

41
studel△ t Responge3(sCore:1)

J~】 ’ I

岫 叭 饿C臼吆炙ce

n臼 r'f巳 冫

V△ )i

七叭色 \

・
ηVF‘
丨 J、

:。
'

b
、 tn h″
npL彡 J讧 n-
卸 v泗 uc/⒅ ㈨ 1、 nR
nv、尺

__ 姒剐眠 n们正驷Vn
b@脚比恣巳 、
^比
— f
jII~ˉ
(】
ˉˉ……ˉˉˉˉˉˉˉˉ…ˉˉ~ˉ ˉˉˉˉˉˉˉˉˉˉˉˉˉ…ˉˉ……ˉˉˉˉˉˉˉˉˉˉˉˉˉ~ˉ ˉˉˉˉˉˉˉˉ-¨ ˉl丿 苎:、 亡:」 f)-:LL∶ ∶ ¨!〖 ∶z° lⅡ ∶iIζ∶.~J~¨ ˉˉ1∶ 丿Σ∶Σ∶!∶ 1!l~ˉ ˉ∶!L!~∶ L:亠 LI:∶ 】)~∶苎:∶
',
=~l::∶

42
oue$t昱 on2-ˉ Overv量 eW
This question tested studentC understanding ofthe】 noney Fnarket,the Innuence。 finterest rates on other elements ofthe
economy and the open-marke“ ook ofthe Federal Rewrve.弘 吐la)asked stude11tsto draw md manVul荻 ethe graph of
the money△ arket,Part(b)determinedwhethcr students understood the relatonshΦ be咖een the interest rate and bond
Prices,Part(c)tested for an understa11ding ofthe reIa“ onship be吣een廴 he interest rate and the aggregate price level。 part
(d)asked students to select the appropoate openˉ 1uark扯 operation to counteract a decrease in the1nterest rate,
玑 e rnean score on this question、 〃as2,65∶ byhich is44percqnt ofthe FnaxlmuΠ 1PossibIe score of6Points,students did
lPe叩 wdl“ drawing the money market,sll晚 h建 the money demand curve,a11d撼 enu即 hg the msuking efFect on the prke
leveI.students did not do so wellin expla1ning how the intercst ratc decrease caused the price level to increase.
the rnostcommon error wasto o111it a Fnenuon that the lower interest rate encourages invest1nent spending or
cOnsumption spending or both,and that Ⅴ
oth the rise in th0se components ofaggrcgate demand冫 aggregate demand rises
and brings about a higher equⅡ ibriun1price level,
Teachers‘ lould stress to studen阝 tllat,when asked to explain a chain ofevents,theyshould be carefulto indude each
J⒈

“ep dongthe way and e~xphh k h enough detd ω darify the mason forthe subscqLIent chaIlge。 On圩 about one-湘 rd of
the students knew ofthe in妮 rse relationship behveen interest rates and bond pr1ces.Although the exam did not require an
explaIla№ n oftll荻 ∞rIcep△ ”om吱 udy ofthe reasons for t№ t rela№ nshV wodd lleV欲 uden“ rmember k and be
Prepared to exPlain扯 ifnecessary

遮3
sco戚 ng Guideline$ ￡or Ouestio=12

6points(2十 1+2+1)

凵
㈦△
<zua0z

5铒
卜 叼 叫 彤臼μ之 曰
‘r

MD

QU村 σ FY
oF MoNBY

(a) 2points:
口 0⒒ e pointis earned for a correctIy labded graph ofthe money market。
。 One Pointis earned forshomng a downward shift ofthe rnoney demand curve and shoWlng a decrease in the
nominalinterest rate uohg arrows,labels or dotted hnes.

(b) 1point:
。 One pointis earned for steung that bond Prices w】 ⒒rise in the short run.

2Points∶
。 One point is earned for stat” g that the price level、 ″Ⅱl rise。
■ 0ne Point is earned for the explanation that the price levelincreases beCaus0aggregate demand increases,
and aggregate demand inc阝 飞 :ases bscause interest-sensitiVe spending(investIuent〉 Consumption or net eXports)
Increases.

(d)1point∶
・ One point is earned for stating thatthe Fed co讧 ld sell bonds to decrease the Fnoney supPly and raise the interest
rate back to the originallevel,

妞
sample$tudent R醪 spo逸 甾gs啻or Ou翕 stioJ12
student Response1(gc。 re:6)

t∧ 审咆 殁诒汴 冖
con‘

45
 student Response1rCOnJhued,

46
stude廴 t Regpon$e2(sc¤ re:龟 )

z。 ‘ ,日 1.

0Ⅳ q。 J。 ω幻
。

彳DI・
' 刀 ‘磅 〃D"

氵
efcrrJ艹 ~d
枷 s。

汕 v″ 庞

勃 ‘v。 vtf加
h~臼
I`⒒
c∫ 泓'庞 c砌
寸炻 钱〃s/J屁 冗凵灰

' 召Vρ y亻 灿≈ov'

47
 student Response2rc0刀 tfnⅡ ed,

j~J1r刀
阝
犭￡ / 民皆叩汁

瓶 召CC,冫 ^《
9hu壳
宀呻 F劬 乒 ″勿F扫 q
。(冖 竿 夕 ln・ '搠
冫 V炙

碴8
$tuden免 Re$po⒒ 移e3(score:2)

Tho怂 tudent lo吼 1po血 h partlb)允 r“ rrecdy哎 缸

四 鸭 th甙 an mcⅡ Ⅱe h theno耐 nd血 erest r蔽 e would cau∞
bond p五 ces to d∝ rease.I【 le studentlost2points in part(cl for incorrecdy sta由 thatan hcKase h曲 e non血
鸡 lal
hterest rate would cause tile pr括 e level to stay曲 e same and forincorrectl,/st扯 hg that山
ere would be no changein
aggregate dem甲 d。 Ihe studentlo哎 1p⒍ nt⒒ p弼 t(d)for incoⅡ ecdy☆ 时ing that f曲 e Federal ReseR/e sold bonds the
money supply wodd increase.

49
 Ques色 宝on3-— Ove「 吨 ew .
Ihis question tested studentζ abil⒈ γ to work with the foreign exchange Fnark艽 and their understanding ofthe efIects of
international tiade.
The mean score on this question was2,60,whkh飞 43percent ofthe m旺 恧mum Poss由 le scOre of龟 Points・ ⒊ 忠den“ d廴 d
lvell狨 Ⅱenti即 ng the efFed ofα ports on tlle current∝ comt bdance alld the efed ofan inna№ n rate aFFeKnthl on the
cxchange rate,Howeve△ they had d伍 culty expla“ ”gwh,/the peso depreoated as a re抛 k ofthe inflaton rate由 fFererltiaI,
There wcre” any problems诫 th the labels cln the exchange r荻 e graph,particdarˇ αⅡhevedc耐 臼 os,brhich lvO・ Jld be

most Cleady Iabeled as“ Pesos per Dollar’ ⒒eshiR h the doIlar supply curve in Part(c)Presented a Problem for almost mo¨
thirds ofthe students as we1I,the rnost cO【 nFnon oΠ 1ission was of an explanat∶ on in Part(d)that the higher innati。 n rate in
Argentina rnakes飞 置s.goods relauvely appeahng,thus increasing demand for dollars,oy1fh WhiCh to purchas01置 s,goods。

飞 e foreign exchahge rnarket presented numerous problems for students,suggesung that there is conskhrable room for
imProvennentin the understanding ofthis market,In many waysthe workngs oftl【 e foreign exchange market resemble
those ofthe market for any good,aIld reminders ofthesF similaoties can bolster comfort with this mode1,It“ also

hnportant for students to use exphcit ax必 labels th荻 are specinc t。 the currencies involved,and the co∏ Ⅱuon errors with
Iabels suggest that rnore practice飞 ″⒒h labehng、 ″ould innprove scores for rnany students.

50
scoF蜘 de⒒ ⒒e峦 for Que瑟 tiom3
G哏 宝
"σ

6points(1+1十 2+2)

〈
a)1poiot∶
ⅡOne P“ nt k earned for stat“ g that Argenun曲 aggregate deman￠ 诫ll fall becaⅡ e the purchase results h increased
irnports εr decreased net exports冫 ltFhich are components ofaggregate demand.

(b)I point:
・ One pointis earned for stating thatthc1Jnited states current account△
Vlll be in surplus or increases because exports
are recorded as a creditin the current account。
∝田宀
舀 <凵
d0°
0∞
ω宀
.∞
.0

Q′ Q QUANTITY OF
U。 s,DOLLARs

(c) 2Points:
■ One pointis earned【 or a correctly labeled graph ofthe dolIar rnarket.
■ One pointis earned for sho飞 ving a leftward shift ofthe supply curve and indicating that the value ofthe dollar
against the peso increases,using arrows,labels or dotted lines

(d)2points∶
・ One point is earned for stating that the peso wnl depreciate against thc dolla⒈
■ One pointis earned for explaining that the higherinnation rate in Argentina rnakes1工
s。 goods less expensive
(or more attract卜 el than Argentinean goods,

51
 Samp【 e stu镇 ￠mt Re$po⒒ ses￡ or Oue$tion3
studont Re$ponse1(score:6)

dec叼 Ⅱ。
o l口 por活 ~ η队‘

¨一嫒甲型廴“处 ・hd鲰 皈 卫嘿挚些

=垫垫型
・

丬 V。 : d・ Do-。 Ip sole 。￠ 啉 巳 ∞由 ~
0
`哆

盏 →

Ι毖 ,

鉴 噫 Pl
埯爹

‰ %、
qu。 n+:tˇ F 口‘d。
。 I∶ G「 ￡
匚ˇ
0乙
student Re$ponse1fcont加 ued,

‰ c+o α Vs 口o¤ ds oJr;I

In飞
t认 纽 书 n父 。 CQns焖 erF

ε
° :n G°

53
 student Response2(Score:4)

“
stu咬 ent Rθ $p硷 nge2(℃ onJnued,

55
studθ nt Response3(sCore:1)

— —
屮

・
kJ:饿 rGh″ h∶ h审 担 枇 m ‘
汁 L u"龟 略 扣 c贺 ⅡⅡ t/0fJ 忆 Jncrq9G

CommentaFy ¨ ¨ Ⅱ r,=讠 ∴

η 乍s” dent"甲 Kd1p邴 扭 Part⑷ ” r阝 te灬 g冉 忡 0廴 醉 谰 啶'诫 decrease da竿

i鞲爨 饕 飨 鞲
铧 号

56
Chapter
■ Tab1e4.1-ˉ section I and II scores
■ Table4.2-ˉ scoring lsrorksheet
■ Table4.3-ˉ SCore Distributions
■ Table4.4_ˉ section I scores and1⒋ p scores
■ How AP scores Are Determined
ⅡR StausticalInfOrmauOn
TabIe4,1shows and summarizes score distributions for
each ofthe free-response questions.The scoring worksheet
presented in Table4,2Provides stePˉ byˉ s住 ep instructions for
calculating Ap sectlon and Composite scores and conv0rting
compos⒒ e scores to'气 P Exan△ scores,Table4,3includes
distributions for the overall exarn scores,lllo score

■ College ComparabⅡ hy Studies distributions conditioned on rnultiPle-choice performance

presented in Table4.4are usefulin estimating a student、
■ Reminders for A11score Report Recipien攵 s
AP Exan△ score given only the student℃ rnultip1e-choice
■ Reporting AP scores score,
■ Purpose ofAP scores College comparabiIity studies,which are conducted to
cdlect i11format⒗ n forsetthg AP score cut-p⒍ Ilts氵 are
1his chapter presents statistical information about overall
brieny discussed in this chapter.In addition,the pl111rpose
student performance on the2010」 ⒋pˇIacroecono∏ 1ics
and intended use ofAp Exarl△ s are re⒒ erated to Promote
Exam。
approPriate interPretation and use ofthc AP Exam and
・
exanl resuIts.

′
Table每 .1-section1and I1scores
For sect丘 om1Answer Key and Percent Amswerhg Correcd弘 pLease see pag63L-32ofthis book,
△he壬 oⅡ ol,ring table shows the score distrlbutions for AP students on eaCh free-response questⅠ 0n
fronl the2010AP Macroeconomics EXam.

ouestion1 ouegtion2 Que忠 tion3

score No.of percent No,of Percent No。 o￡ Percent
students at score studθ nts at score studentg at score
∞

1,彳 16 182
987

3,168 407
5,945 764
10,686 1373
6 12.954 1664 5‘ 505 707 2369 304
5 10.852 139钅 10、 985 1钅 11 8,585 1103
亻 9,172 1178 9,820 1261 12,547 1612
3 7,235 929 13,310 17△ 0 15,573 2000
2 5,089 654 1⒋ 19g 1824 18.‘ 22 2366
1 4t190 538 11t241 144龟 11`40迳 1465
o 4氵 766 612 7,624 979 钅.454
No Response 2,377 305 5.166 664 钅‘496
Total studen峦 77`850 77,850 77.850
Mean 266
s诒 ndard
Deviation
258

l冫 ean as
】
Percent of 48
lvIaxi【 nu¤ re
`sc°

叩
 a-scθ rimg
Tabl密 噫。 W0rk$heet .

EfFectlve Ⅵ ay2011Exam艹 ,total scores on the rnultiPle¨ choice section are based on the number ofquestions
戍th the卜 ￡
answered correct轩 Punts are not deducted for incorrect ansWers and no Ponts are awarded for unanswered questons.
The了na疝 rnu¤ 1possible lveighted score on SeCtion I is60points,and it accounts for two thirds ofthe rna时 muΠ 1possible
composite score.

section1:Multip1e Choice
× 10169=
Number Correct eighted
Ⅵ氵
(out of59) secuon I sc。 re
(Do notround)

sedⅡ on lI:Free Re臼 ponse

ouestion1 × 1,5000=
(out of10) Ap soore
Conver$ion Cha洗
ouesu° n2 × 1.2500= MacroeconomIc臼
(out of6)
Composite
Score Ranqe AP sGOre
ouestlon3 × 12500=
70-90 5
(out o￡ 6)
56-69 4
48-55 3
38-媛 7 2
Surn〓 0-37 1
Weighted
Section Π ScOre
(Do notround)

Composite score

mFeighted 叮eighted
、 Composite ScOre
seCtion I ScOre Sectlon Ⅱ ScOre (Round to nearest
v氵 ho1e numbe亡 )

艹Priorto the May2011Exam,a fraction ofa point was deducted for each incorrect response on mukiple-choice questions

58
 TabIe4.3-ˉ score Di$劬 obu1ioms
More than53perccnt ofthe AP哎 uden‘ who took tho exam eamed a qLlali即 ing score of3or曲 ove,

E双 am N-bθ r of Pθ rce⒒ t at
scorθ studθ nt日 score
EXtremely、 qlda⒒ ned 5 10t312 1325
^`eⅡ
妒渑ⅡqtXal愠 ed 4 19,643 2523
ouallfied 3 11'g97 1541
Possibly qual愠 ed 2 13,137 1687
No recommenda“ on 1 22,761 292珞

TOtal Number of students 77‘ 850

加1ean scOre 2.76

standard Dev反 atlon 1妣

4-seCtion1sCores and AP score臼

tab1e连 。
Dueto the cha△ gesin muI硅 p二 e-choice sco呐 吧 ,由 e ran宫 e ofscores In TabIe4.4has
changed,由 ough the PeFce艹 tages rema【 n岱 e saIne。
For a given range offnultiple-choice scores,this table shows the perc。 ntage ofstudents receiving each AP scol℃ .Ifyou have
calculated the FnultipIe¨ choice score(Weighted section I score)by usirg the￡ 。
rmula shown in Table4,2,you can use this
table to flgure out the Inost"kely score that the student would receive based only on that rnultipleˉ choice score.

AP s￠ orθ
Mu1tipIe~Ch° 丘ce scoFe Ι 2 3 钅 Tota【

52to60 00% 00% 00% 37°/o 963% 63%

秕 to51 o0% 00% 18% 622% 360% 199%
36to43 o1% 74% 返21% 503° /。 o1% 248%
28to35 184% 600% 208% 08% 00% 220%
20to27 88g% 110% o1% o0% o0% 166o/o

o1o19 999% 01% 009各 o0°/。 00% 104%

To1d 292% 169% 154% 25~2% 133% 1000%

59
砜oW盘 P sC0re$AFe Dete摁 i扭 ed ■ the distribution of scores on diferent Parts of
the exam
As described in Chapter Ⅱ,the AP Macroeconomics Exam
■ AP score distributions仃 om the Pastthree yeas
has two sections.Section I originally had60rnultiPle-choice
see Table4.3姒 )r the score di虻 r由 utions for the2010AP
f巍 苫 黠
监 t亠 【:∶ :∶ r⒊ ;氵)⒊ r驻 、
琵 f Macroecono豇 1ics EXam.
o to a rnaxi1nuⅡ 1possible score of59points,Section I1
.Questlon1has ・
consists ofthree free¨ response questionρ
a sCore range from a minimum possib1e score ofO to a 生批 婪 嚣 潜 搬 蹒 谶 Ⅰ琪 f扣
mω <irnunl Possible score of IO points,and questions2and3 AP Exams爷 re develoPed,how validity and reliah1ity studies
ects・
have a Possible score Fange ofO to6polnts, are conducted,and other data on al1AP su叻
tbe scores on the diσ erent parts ofthe exan△ are
combined to produce a composite score that ranges fron1a Co⒒ eσ e ComparabⅡ ity studie$
Fninirnun1Possible score ofO to a InaXImun1Possible score ege
丁he Advanced Placcment Progranl has conducted coⅡ
of90Points,In calcu1ating the composite scores,scores on
diσ erent paFts are rnultiphed by、 ˇeights. j:∶
刂
∶:∶ 黠 ∶
∶nts
强 :;l∶ I1∶ ∶∶
∶∶|;∶ ∶黯 ;扌 群 :∶:∶

ComPosite soores are not released to students,schools or

with that of college students in related courses Xv° ho
colleges。 Instead,the coFnP0site scores are conVerted to
have taken the AP Exam atthe end oftheir course.In
scores on an Ap5冖 point scale and it is these scores that are
genera1AP cut¨ points are selccted so tha父 the Iowest AP

Ⅲ藕/
ˉ

蓦搀盯 鞲投
51s equivalent to the aVerage A in college,thelowest AP
4is equivalentto the aVerage B,and the lowest AP3is
f夜 equ1valent t° the average C lsee below).
and described in detail here,

摞程de
1. the score on section Iis c扭 cdated。 Section I scores are
calculated by totaling the number ofcorrect ans、 ˇers. ¨
胛鼠 |c。
Ihe m铡 mum Po“ ible wcighted score on Sedon!ˉ s
um 5
60points,ahd】 t accounts for two thirds ofthe InaKi血 A
popsible comPosite score,

2. the score on section I芟 is calcu1ated。 the weights for B

questions in secⅡ 0n II are detern1ined sˇ ch that
C
question l contributes50percent to the rnaxiFnum
Posslble weighted free~response scOre and questions2 D
and3each contribute25Percent^the weighted scores on
the questions of section1I are su111rned to give the tota1
weighted score for Section II.The rn出 amum weighted
score on section I1is30points,and it actounts for one Research studies conducted by coneges and universities
third ofthe rnax1muΠ 1possib1e composite score. and by the AP Program indicate that AP students generally
comPosite scores are receive higher grades in advanced courses than do students
3. AP Exam scores are calculated。
、
vho have taken the regular丘 rst∶ year courses at the
calculated by adding the weighted Section1and
institution.Colleges and univers⒒ ies are encouraged to
、eighted section II scores togetheL the AP Exam scores
^厂
凼e comPosite scores to the periodically uF1dertake such studies to estab1ish aPpropriate
are calculated by comparin宫
pohcy for accePting AP scores and ensure that adⅡ 1issions
four composite cut-scores sdected during the score-
and placemc11t standards remain val⒙ .It o critical to veri卸
setting Process.A variety ofinformation is available
that admis“ ons and placemenf m0asures establ、 hed for
during the score-setting process to help deterFnine the
a Previous class continue for future classes,suInnlaries
cut-sCores corresponding to each AP score∶
ofseveral stud1es are available at AP Centra1.Also on
■ s佼 atisticalinformation based on test score equaung
the Cdlege Board Web蜕 te灬 the free Adm1tted Class
■ Cdkge/AP℃ oⅡ cQmPamh1i叩 哎u扯 “,f Jraihue Evaluation Servicei∷ (http〃 /pro如 ssionals,c° 1iege0oard.com/
■ the Chief Readero observations ofstudentζ h螅 her-ed/validityl that can Predict howadmitted college
free response Performance students、 〃⒒l perforn1at a Particular inst1tution generally
and how successful they can be in specinc classes.

60
 AP® Macroeconomics
2010 Free-Response Questions

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commitment is embodied in all of its programs, services, activities and concerns.

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and the acorn logo are registered trademarks of the College Board. Admitted Class Evaluation Service is a trademark owned by
the College Board. PSAT/NMSQT is a registered trademark of the College Board and National Merit Scholarship Corporation.
All other products and services may be trademarks of their respective owners. Permission to use copyrighted College Board
materials may be requested online at: www.collegeboard.com/inquiry/cbpermit.html.

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 2010 AP® MACROECONOMICS FREE-RESPONSE QUESTIONS

MACROECONOMICS
Section II
Planning Time—10 minutes
Writing Time—50 minutes

Directions: You have 50 minutes to answer all three of the following questions. It is suggested that you spend
approximately half your time on the first question and divide the remaining time equally between the next two
questions. In answering the questions, you should emphasize the line of reasoning that generated your results; it is
not enough to list the results of your analysis. Include correctly labeled diagrams, if useful or required, in explaining
your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional
changes. Use a pen with black or dark blue ink.

1. Assume that the United States economy is currently in long-run equilibrium.

(a) Draw a correctly labeled graph of aggregate demand and aggregate supply and show each of the following.
(i) The long-run aggregate supply curve
(ii) The current equilibrium output and price levels, labeled as YE and PLE, respectively
(b) Assume that the government increases spending on national defense without raising taxes.
(i) On your graph in part (a), show how the government action affects aggregate demand.
(ii) How will this government action affect the unemployment rate in the short run? Explain.
(c) Assume that the economy adjusts to a new long-run equilibrium after the increase in government spending.
(i) How will the short-run aggregate supply curve in the new long-run equilibrium compare with that in
the initial long-run equilibrium in part (a) ? Explain.
(ii) On your graph in part (a), label the new long-run equilibrium price level as PL2.
(d) In order to finance the increase in government spending on national defense from part (b), the government
borrows funds from the public. Using a correctly labeled graph of the loanable funds market, show the effect
of the government’s borrowing on the real interest rate.
(e) Given the change in the real interest rate in part (d), what is the impact on each of the following?
(i) Investment
(ii) Economic growth rate. Explain.

2. A drop in credit card fees causes people to use credit cards more often for transactions and demand less money.
(a) Using a correctly labeled graph of the money market, show how the nominal interest rate will be affected.
(b) Given the interest rate change in part (a), what will happen to bond prices in the short run?
(c) Given the interest rate change in part (a), what will happen to the price level in the short run? Explain.
(d) Identify an open-market operation the Federal Reserve could use to keep the nominal interest rate constant
at the level that existed before the drop in credit card fees. Explain.

© 2010 The College Board.

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-2-
 2010 AP® MACROECONOMICS FREE-RESPONSE QUESTIONS

3. A United States firm sells $10 million worth of goods to a firm in Argentina, where the currency is the peso.
(a) How will the transaction above affect Argentina’s aggregate demand? Explain.
(b) Assume that the United States current account balance with Argentina is initially zero. How will the
transaction above affect the United States current account balance? Explain.
(c) Using a correctly labeled graph of the foreign exchange market for the United States dollar, show how
a decrease in the United States financial investment in Argentina affects each of the following.
(i) The supply of United States dollars
(ii) The value of the United States dollar relative to the peso
(d) Suppose that the inflation rate is 3 percent in the United States and 5 percent in Argentina. What will happen
to the value of the peso relative to the United States dollar as a result of the difference in inflation rates?
Explain.

STOP

END OF EXAM

© 2010 The College Board.

Visit the College Board on the Web: www.collegeboard.com.

-3-
 AP® Macroeconomics
2010 Scoring Guidelines

The College Board

The College Board is a not-for-profit membership association whose mission is to connect students to college success and
opportunity. Founded in 1900, the College Board is composed of more than 5,700 schools, colleges, universities and other
educational organizations. Each year, the College Board serves seven million students and their parents, 23,000 high schools, and
3,800 colleges through major programs and services in college readiness, college admission, guidance, assessment, financial aid
and enrollment. Among its widely recognized programs are the SAT®, the PSAT/NMSQT®, the Advanced Placement Program®
(AP®), SpringBoard® and ACCUPLACER®. The College Board is committed to the principles of excellence and equity, and that
commitment is embodied in all of its programs, services, activities and concerns.

© 2010 The College Board. College Board, ACCUPLACER, Advanced Placement Program, AP, AP Central, SAT, SpringBoard
and the acorn logo are registered trademarks of the College Board. Admitted Class Evaluation Service is a trademark owned by
the College Board. PSAT/NMSQT is a registered trademark of the College Board and National Merit Scholarship Corporation.
All other products and services may be trademarks of their respective owners. Permission to use copyrighted College Board
materials may be requested online at: www.collegeboard.com/inquiry/cbpermit.html.

Visit the College Board on the Web: www.collegeboard.com.

AP Central is the official online home for the AP Program: apcentral.collegeboard.com.
 Question 1

10 Points (2 + 2 + 2 + 2 + 2)

(a) 2 points:
• One point is earned for a correctly labeled graph with a downward-sloping AD curve, an upward-
sloping SRAS curve, and the points PLE and YE on the vertical and horizontal axes.
• One point is earned for showing a vertical LRAS curve at YE.

(b) 2 points:
• One point is earned for showing a rightward shift of the AD curve on the graph in part (a).
• One point is earned for stating that the unemployment rate would fall and explaining that this is
because real output increases.

(c) 2 points:
• One point is earned for stating that the short-run aggregate supply curve will shift to the left and
showing PL2 correctly on the graph in part (a).
• One point is earned for explaining that the actual price level is higher than was expected or that
wages and commodity prices adjust to the higher price level, causing the SRAS curve to shift to
the left.
 Question 1 (continued)

(d) 2 points:
• One point is earned for a correctly labeled graph of the loanable funds market.
• One point is earned for showing a rightward shift of the demand curve, resulting in a higher
interest rate OR a leftward shift of the supply curve, resulting in a higher interest rate.

(e) 2 points:
• One point is earned for stating that investment spending will decrease.
• One point is earned for explaining that the decrease in investment slows down capital formation,
leading to a reduction in the economic growth rate.
 Question 2

6 points (2 + 1+ 2 + 1)

(a) 2 points:
• One point is earned for a correctly labeled graph of the money market.
• One point is earned for showing a downward shift of the money demand curve and showing a
decrease in the nominal interest rate using arrows, labels or dotted lines.

(b) 1 point:
• One point is earned for stating that bond prices will rise in the short run.

(c) 2 points:
• One point is earned for stating that the price level will rise.
• One point is earned for the explanation that the price level increases because aggregate demand
increases, and aggregate demand increases because interest-sensitive spending (investment,
consumption or net exports) increases.

(d) 1 point:
• One point is earned for stating that the Fed could sell bonds to decrease the money supply and
raise the interest rate back to the original level.
 Question 3

6 points (1 + 1 + 2 + 2)

(a) 1 point:
• One point is earned for stating that Argentina’s aggregate demand will fall because the purchase
results in increased imports or decreased net exports, which are components of aggregate demand.

(b) 1 point:
• One point is earned for stating that the United States current account will be in surplus or
increases because exports are recorded as a credit in the current account.

(c) 2 points:
• One point is earned for a correctly labeled graph of the dollar market.
• One point is earned for showing a leftward shift of the supply curve and indicating that the value of
the dollar against the peso increases, using arrows, labels or dotted lines.

(d) 2 points:
• One point is earned for stating that the peso will depreciate against the dollar.
• One point is earned for explaining that the higher inflation rate in Argentina makes U.S. goods less
expensive (or more attractive) than Argentinean goods.
 AP® Macroeconomics
2010 Free-Response Questions
Form B

The College Board

The College Board is a not-for-profit membership association whose mission is to connect students to college success and
opportunity. Founded in 1900, the College Board is composed of more than 5,700 schools, colleges, universities and other
educational organizations. Each year, the College Board serves seven million students and their parents, 23,000 high schools, and
3,800 colleges through major programs and services in college readiness, college admission, guidance, assessment, financial aid
and enrollment. Among its widely recognized programs are the SAT®, the PSAT/NMSQT®, the Advanced Placement Program®
(AP®), SpringBoard® and ACCUPLACER®. The College Board is committed to the principles of excellence and equity, and that
commitment is embodied in all of its programs, services, activities and concerns.

© 2010 The College Board. College Board, ACCUPLACER, Advanced Placement Program, AP, AP Central, SAT, SpringBoard
and the acorn logo are registered trademarks of the College Board. Admitted Class Evaluation Service is a trademark owned by
the College Board. PSAT/NMSQT is a registered trademark of the College Board and National Merit Scholarship Corporation.
All other products and services may be trademarks of their respective owners. Permission to use copyrighted College Board
materials may be requested online at: www.collegeboard.com/inquiry/cbpermit.html.

Visit the College Board on the Web: www.collegeboard.com.

AP Central is the official online home for the AP Program: apcentral.collegeboard.com.
 2010 AP® MACROECONOMICS FREE-RESPONSE QUESTIONS (Form B)

MACROECONOMICS
Section II
Planning Time—10 minutes
Writing Time—50 minutes

Directions: You have 50 minutes to answer all three of the following questions. It is suggested that you spend
approximately half your time on the first question and divide the remaining time equally between the next two
questions. In answering the questions, you should emphasize the line of reasoning that generated your results; it is
not enough to list the results of your analysis. Include correctly labeled diagrams, if useful or required, in explaining
your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional
changes. Use a pen with black or dark blue ink.

1. A country’s economy is in a short-run equilibrium with an output level less than the full-employment output
level. Assume an upward-sloping aggregate supply curve.
(a) Using a correctly labeled aggregate demand and aggregate supply graph, show the following.
(i) Full-employment output, labeled as YF
(ii) Equilibrium real output and price level, labeled as YE and PLE, respectively
(b) Assume that the country’s government increases domestic military expenditures. On the graph from part (a),
show how the increased military expenditures affect the following in the short run.
(i) Aggregate demand
(ii) Equilibrium real output and price level, labeled as Y2 and PL2, respectively
(c) Using a correctly labeled graph of the short-run Phillips curve, show the effect of the increased military
expenditures in the short run, labeling the initial point as A and the new point as B.
(d) Assume that the increased military spending is financed through government borrowing. What will happen
to the real interest rate? Explain.
(e) Assume that the economy produces only two goods: military goods and civilian goods. Using a correctly
labeled production possibilities curve, show the effect of the increase in military expenditures from part (b),
labeling the initial point as C and the new point as D.

© 2010 The College Board.

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GO ON TO THE NEXT PAGE.

-2-
 2010 AP® MACROECONOMICS FREE-RESPONSE QUESTIONS (Form B)

2. The central bank of the country of Sewell sells bonds on the open market.
(a) Assume that banks in Sewell have no excess reserves. What is the effect of the central bank’s action on
the amount of customer loans that banks in Sewell can make?
(b) Using a correctly labeled graph of the money market, show the effect of the central bank’s action on the
nominal interest rate in Sewell.
(c) What is the effect of the central bank’s action on each of the following in Sewell?
(i) Price level
(ii) Real interest rate. Explain.
(d) Given your answer in part (c)(ii), how is the international value of Sewell’s currency, the ono, affected?
Explain.

3. How does each of the following changes affect the real gross domestic product and price level of an open
economy in the short run? Explain each.
(a) An increase in the price of crude oil, an important natural resource
(b) A technological change that increases the productivity of labor
(c) An increase in spending by consumers
(d) The depreciation of the country’s currency in the foreign exchange market

STOP

END OF EXAM

© 2010 The College Board.

Visit the College Board on the Web: www.collegeboard.com.

-3-
 AP® Macroeconomics
2010 Scoring Guidelines
Form B

The College Board

The College Board is a not-for-profit membership association whose mission is to connect students to college success and
opportunity. Founded in 1900, the College Board is composed of more than 5,700 schools, colleges, universities and other
educational organizations. Each year, the College Board serves seven million students and their parents, 23,000 high schools, and
3,800 colleges through major programs and services in college readiness, college admission, guidance, assessment, financial aid
® ® ®
and enrollment. Among its widely recognized programs are the SAT , the PSAT/NMSQT , the Advanced Placement Program
® ® ®
(AP ), SpringBoard and ACCUPLACER . The College Board is committed to the principles of excellence and equity, and that
commitment is embodied in all of its programs, services, activities and concerns.

© 2010 The College Board. College Board, ACCUPLACER, Advanced Placement Program, AP, AP Central, SAT, SpringBoard
and the acorn logo are registered trademarks of the College Board. Admitted Class Evaluation Service is a trademark owned by
the College Board. PSAT/NMSQT is a registered trademark of the College Board and National Merit Scholarship Corporation.
All other products and services may be trademarks of their respective owners. Permission to use copyrighted College Board
materials may be requested online at: www.collegeboard.com/inquiry/cbpermit.html.

Visit the College Board on the Web: www.collegeboard.com.

AP Central is the official online home for the AP Program: apcentral.collegeboard.com.
 Question 1

10 Points (2 + 2 + 2 + 2 + 2)

(a) 2 points:
• One point is earned for a correctly labeled AD/AS graph with vertical LRAS at YF.
• One point is earned for showing equilibrium output and price level to the left of YF.

(b) 2 points:
• One point is earned for showing a rightward shift of the AD curve.
• One point is earned for showing the new equilibrium output and price level.

(c) 2 points:
• One point is earned for a correctly labeled graph of the short-run Phillips curve.
• One point is earned for correctly labeling points A and B on the SRPC that indicate a leftward
movement along the SRPC.
(d) 2 points:
• One point is earned for stating that the real interest rate will rise.
• One point is earned for the explanation that government borrowing increases the demand for
loanable funds.
 Question 1 (continued)

(e) 2 points:
• One point is earned for a correctly labeled production possibilities curve.
• One point is earned for labeling points C and D, showing a movement toward the curve and an
increase in military goods.
 Question 2

7 points (1 + 2 + 3 + 1)

(a) 1 point:
• One point is earned for stating that bank loans will decrease.

(b) 2 points:
• One point is earned for a correctly labeled graph of the money market.
• One point is earned for showing a leftward shift of the MS curve and an increase in the nominal
interest rate.

(c) 3 points:
• One point is earned for stating that the price level will fall.
• One point is earned for stating that the real interest rate will rise.
• One point is earned for the explanation that with an increase in the nominal interest rate and a
decrease in the price level, the real interest rate increases.

(d) 1 point:
• One point is earned for stating that the ono will appreciate, because the increase in the demand for
Sewell’s financial assets causes an increase in the demand for the ono.
 Question 3

4 points (1 + 1 + 1 + 1)

(a) 1 point:
• One point is earned for stating that real GDP will fall and the price level will rise, because the
increase in the price of oil raises input costs and causes the short-run aggregate supply curve to
shift to the left.

(b) 1 point:
• One point is earned for stating that real GDP will rise and the price level will fall, because the
increase in labor productivity reduces unit input costs and causes the short-run aggregate supply
curve to shift to the right.

(c) 1 point:
• One point is earned for stating that real GDP will rise and the price level will rise, because the
increase in spending causes the aggregate demand curve to shift to the right.

(d) 1 point:
• One point is earned for stating that real GDP will rise and the price level will rise, because the
depreciation of the currency will cause net exports to rise and the aggregate demand curve to shift
to the right.