AP Macro Final Review

Microeconomics deals with?
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Microeconomics deals with?
individual decision-makers of the economy
What is a part of macroeconomics?

A. A study of the impact of a tax reduction on the profits of a business
B. A study of recessions
C. A study of the unemployment of workers displaced by technological change in the typesetting industry
D. A study of the impact of subsidizing public education
B
The opportunity cost of something is
A. Greater during periods of rising prices
B. Equal to the money cost
Less during periods of falling prices
C. What is given up to acquire it
D. Equal to zero for something that is given to you as a gift
C
Although water is very abundant in most places, it is still a scarce resource because
A. It has no alternative uses
B. There is not enough of it to meet all needs at zero cost
C. It is a free good
D. Scarce goods in general are not all that costly
E. It is a public good
B
When a local factory closes, why does it spell bad news for the local restaurants?
A. Sales taxes are likely to increase
B. Unemployed factory workers have lower incomes and are less likely to dine out
C. Unemployed factory workers are eligible for government unemployment benefits
D. The opportunity cost of dining out has fallen
E. Prices of raw materials like meat and vegetables are likely to fall
B
Suppose government economists recommend that policy makers should either increase taxes or decrease government spending. This recommendation was most likely based on the fact that
A. A recession had been detected
B. Too much spending was causing inflation
C. High unemployment was happening
D. Aggregate economic output had been declining
E. Workers enjoy paying higher taxes
A
If during a period of several months we observe the economy to be simultaneously increasing its level of output and employment we could assume that the economy is in
A. A depression
B. An expansion
C. A recession
D. A turning point between a recovery and a downturn
E. The trough of the business cycle
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