Cracking the AP Economics Macro & Micro Exams, 2017 Edition (College Test Preparation)
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EVERYTHING YOU NEED TO SCORE A PERFECT 5. Equip yourself to ace the AP Economics Macro & Micro Exams with The Princeton Review's comprehensive study guide—including thorough content reviews, targeted strategies for every question type, access to our AP Connect online portal, and 2 full-length practice tests with complete answer explanations.
We don't have to tell you how tough it can be to master AP economics—or how deeply a stellar exam score can impact your chances of getting into your top-choice college. Written by the experts at The Princeton Review, Cracking the AP Economics Macro and Micro Exams arms you to take on either test with:
Techniques That Actually Work.
• Tried-and-true strategies to avoid traps and beat the test
• Tips for pacing yourself and guessing logically
• Essential tactics to help you work smarter, not harder
Everything You Need to Know for a High Score.
• Comprehensive content review for all test topics
• Up-to-date information on the 2017 AP Economics Macro & Micro Exams
• Engaging activities to help you critically assess your progress
• Access to AP Connect, our online portal for helpful pre-college information and exam updates
Practice That Gets You to Excellence.
• 2 full-length practice tests (1 Macro and 1 Micro) with detailed answer explanations
• Practice drills at the end of each content chapter
• Step-by-step walk-throughs of sample questions
economic activity and feel that debt or deficit ceilings should be in place to limit the burden of repayment. When governments use expansionary fiscal policy, they increase spending, decrease taxes, or a combination of both. These expansionary policies will move an economy toward deficit, as now the government will be spending more and/or receiving less. On the other hand, when a government imposes a contractionary fiscal policy, the decreased spending/increased taxes will move an economy toward
decreases (shifts left) or aggregate supply increases (shifts right). This information alone allows you to begin the Process of Elimination. Start with government spending. Since government spending is part of aggregate demand (AD), any increase in government spending will increase AD, thus shifting it to the right, which would increase prices. Therefore, you can eliminate answers (A) and (D). Now keep going! If income taxes decrease, then people would have more money in their pockets, which has
(A) Price equal to marginal cost (B) Relative welfare loss (C) Relatively high price (D) Relatively low quantity (E) Relatively inferior quality 8. Which of the following is likely to have the most elastic demand? (A) A good with a vertical demand curve (B) Cigarettes (C) All types of soda pop (D) Sprite (E) Life-sustaining pills 9. What are the effects on the supply and demand curves for Frisbees if a new procedure reduces the cost of making Frisbees?
down immediately, thus eliminating its variable costs and having to pay only for its fixed costs. 22. C This situation involves a negative externality—noise from the party traveling where it isn’t wanted. The most efficient parties are held until the marginal benefit (MB) equals the marginal social cost (MSC), which is the marginal private cost (MPC) plus the marginal external cost (MEC). Banning parties might not be efficient, because the marginal benefit from the first few parties might exceed
whose GDP is being calculated but not the income of citizens working abroad. Thus, the net income of foreigners must be added to NI to obtain GDP. 38. E The Phillips curve depicts a trade-off between inflation and unemployment—when one increases, the other decreases. Shifts in the aggregate supply curve result in inflation and unemployment both increasing or both decreasing. An increase in input costs will shift AS to the left and increase the price level; the corresponding increase in