Scarcity means human wants for goods and services exceed the available supply. Supply is limited because resources are limited. Demand, however, is virtually unlimited. Whatever the supply, it seems human nature to want more.
100 people / 10 people per ham = a maximum of 10 hams per month if all residents produce ham. Since consumption is limited by production, the maximum number of hams residents could consume per month is 10.
She is very productive at her consulting job, but not very productive growing vegetables. Time spent consulting would produce far more income than it what she could save growing her vegetables using the same amount of time. So on purely economic grounds, it makes more sense for her to maximize her income by applying her labor to what she does best (i.e. specialization of labor).
The engineer is better at computer science than at painting. Thus, his time is better spent working for pay at his job and paying a painter to paint his house. Of course, this assumes he does not paint his house for fun!
There are many physical systems that would work, for example, the study of planets (micro) in the solar system (macro), or solar systems (micro) in the galaxy (macro).
Draw a box outside the original circular flow to represent the foreign country. Draw an arrow from the foreign country to firms, to represents imports. Draw an arrow in the reverse direction representing payments for imports. Draw an arrow from firms to the foreign country to represent exports. Draw an arrow in the reverse direction to represent payments for imports.
There are many such problems. Consider the AIDS epidemic. Why are so few AIDS patients in Africa and Southeast Asia treated with the same drugs that are effective in the United States and Europe? It is because neither those patients nor the countries in which they live have the resources to purchase the same drugs.
Public enterprise means the factors of production (resources and businesses) are owned and operated by the government.
The United States is a large country economically speaking, so it has less need to trade internationally than the other countries mentioned. (This is the same reason that France and Italy have lower ratios than Belgium or Sweden.) One additional reason is that each of the other countries is a member of the European Union, where trade between members occurs without barriers to trade, like tariffs and quotas.
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Macro Economic Essays
These are a collection of essays written for my economic blogs.
Exchange Rate Essays
- Effects of a falling Dollar
- Why Dollar keeps falling
- Discuss Policies to Stop the Dollar Falling
- Does Devaluation Cause Inflation?
- Benefits and Costs of Falling Dollar
- Reasons for Falling Dollar
- The Dollar as the World’s Reserve Currency
Economic Growth Essays
- Evaluate Benefits of Economic Growth
- Essays on Recessions
- Causes of Recessions
- Problems of Recovering from a Recession
- What can Increase Long-Run Economic Growth?
- Discuss Effect of a fall in the Savings Ratio
Inflation Essays
- Discuss the Difficulties of Controlling Inflation
- Should the aim of the Government be to Attain Low Inflation?
- Explain What Can Cause a Sustained Increase in the Rate of Inflation
- Reasons for low inflation in the UK
- Inflation Explained
- Difficulties of Inflation targeting
- Hyperinflation
Unemployment Essays
- Explain what is meant by Natural Rate of Unemployment?
- Should the Main Macro Economic Aim of the Government be Full Employment?
- The True Level of Unemployment in the UK
- What explains low inflation and low unemployment in the UK?
Demand Side Policies
- Discuss effect of Expansionary demand-side policies on Balance of Payments and Environment
- Effects of a Falling Stock Market
- How do Mortgage Defaults affect and Economy?
- Discuss the effect of increased Government spending on education
- Phillips Curve – Trade-off between Inflation and Unemployment
Development Economics
- Why Growth may not benefit developing countries
- Does Aid Increase Economic Welfare?
- Problems of Free Trade for Developing Economies
Fiscal Policy
- Will US Economy benefit from Tax Cuts?
- Can Fiscal Policy solve Unemployment?
- Explain Reasons for UK Current Account Deficit
- Benefits of Globalisation for Developing and Developed Countries
Monetary Policy
- Discuss Effects of an Increase in Interest Rates
- How MPC set Interest Rates
- Benefits of High-Interest Rates (and recessions)
- Who Sets interest rates – Markets or Bank of England?
Economic History
- Economics of the 1920s
- What Caused Wall Street Crash of 1929?
- UK economy under Mrs Thatcher
- Economy of the 1970s
- Lawson Boom of the 1980s
- UK recession of 1991
- The great recession 2008-13
General Economic Essays
- The Dismal Science
- Difference Between Economists and Non Economists
- War and Recessions
- The Economics of Fear
- The Economics of Happiness
- Can UK and US avoid Recession?
- 3 Of the Worst Economic Policies
- Overvalued Housing Markets
- What Went Wrong with US Economy?
- Problem with Bailing out financial sector
- Problems of Personal Debt
- Problem of Inflation
- National Debt in the UK
- How To Survive a Recession
- Can A recession be a good thing?
Chinese Economy
- Problems of Chinese Economic Growth
- Should we worry about a strong China
- Chinese Growth and Costs of Growth
- Chinese Interest Rates and Economic Growth
Model essays
- A2 model essays
- AS model essays
- Top 10 Reasons For Studying Economics
- Inflation explained by Victor Borge
- Funny Exam Answers
- Humorous look at Subprime crisis
AP Macroeconomics Practice Exams
Below you will find links to free AP Macroeconomics practice exams. Hundreds of free practice questions with detailed explanations. Start your exam prep right here!
Official 2012 Practice Test
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Economics Revision Essay Plans
Last updated 17 Dec 2019
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This series of resources provides revision essay plans for a wide variety of essay topics, including synoptic questions.
For the 2019 papers check out our collection of videos on building A* evaluation into your answers
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Essay Plan: Limits on Monopoly Power
Topic Videos
Chains of Reasoning and Evaluation: Fuel Prices in the UK
Exam Support
EU Customs Union Membership (Revision Essay Plan)
Practice Exam Questions
Market for Electric Vehicles (Revision Essay Plan)
Mergers and consumer welfare (revision essay plan), air pollution and policies to control (revision essay plan), policies to improve competitiveness (revision essay plan), economic effects of higher interest rates (revision essay plan), current account deficit & policies (revision essay plan), unemployment and policy trade-offs (revision essay plan), case for cutting the national debt (revision essay plan), micro-finance (2019 revision update), essay on advertising and economic welfare, essay on oligopoly and collusion, policies to control inflation.
Study Notes
Why is high inflation a problem?
Revision essay: exchange rate depreciation and macroeconomic objectives, to what extent should full-employment be the main macro policy objective, housing supply (revision essay plan), minimum alcohol pricing (revision essay plan), oligopoly and collusion (revision essay plan), building confidence in writing synoptic 25 mark essays (edexcel), behavioural and neo-classical economics (revision essay plan), barriers to entry and economic profit (revision essay plan), micro and macro impact of a plastic tax (revision essay plan), edge revision webinar: market failure and government intervention, farm subsidies (revision essay plan), competitiveness of the uk motor industry (revision essay plan), labour migration (revision essay plan), financial market failure (revision essay plan), tariff on chinese steel (revision essay plan), policies to improve food affordability (revision essay plan), reducing a trade deficit (revision essay plan), museums and government subsidy (revision essay plan), fiscal policy and inequality (revision essay plan), globalisation and inequality (revision essay plan), economic inactivity (revision essay plan), competition and consumer welfare (essay technique video), essay plan: is the euro the main cause of the crisis in greece and italy, china: successes and failures essay plan, our subjects.
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There are from 10 to 40 questions in each pool. The exam on Blackboard will randomly select 2 or 3 questions from each pool for each question covered on an exam. The multiple-choice exam is an open book, open note exam which will be taken on-line outside of class time. The three midterm multiple-choice exams will consist of between 30 and 50 ...
Stephen Dobson and Susan Palfreman: Introduction to Economics, Oxford University Press, Oxford / New York 1999, ISBN 978--19-877565-2, pp. 207 to 234 1 Consumption, investment and saving (neither government nor foreign trade) A consumption function ( Questions 1.1 - 1.10) 50 10 Aggregate demand (consumption = C) 40 Graph 1 Output, income (Y)
SAMPLE EXAM QUESTIONS . Notes: - Many of these questions are drawn from past Econ 134 exams. - The instructions accompanying some of the questions take the form, "Decide whether the statement is true, false, or uncertain and explain why. Your explanation determines your grade; you will receive no credit for an answer without an explanation.
06 Value added. Calculate the value added, used for calculating GDP: Input goods 60 Output 230 Pollution due to the production process (estimated) 5. 07 Investment. Calculate investment: Purchases of capital equipment 65 Investment in buildings 50 Decrease in stocks 5. 08 Consumption 1.
Download free-response questions from this year's exam and past exams along with scoring guidelines, sample responses from exam takers, and scoring distributions. AP Exams are regularly updated to align with best practices in college-level learning. Not all free-response questions on this page reflect the current exam, but the question types ...
Full credit for either of the alternative answers. In the case of the rst alternative answer: 1 point for noting the statement is \mostly false". 4 points for a well-illustrated answer. Partial credit at the grader's own judgement. c. (5 points) \In the long run, if China continues to peg its currency to the
Answer all questions Part A (Prof. Laibson): 60 minutes Part B (Prof. Barro): 60 minutes Part C (Prof. Farhi): 60 minutes Part D (Prof. Rogoff): 60 minutes PLEASE USE A SEPARATE BLUE BOOK FOR EACH QUESTION AND WRITE THE QUESTION NUMBER ON THE FRONT OF THE BLUE BOOK. PLEASE PUT YOUR EXAM NUMBER ON EACH BOOK.
GDP $550. (a) Draw a correctly labeled graph of the aggregate demand, short-run aggregate supply, and long-run aggregate supply curves, and show each of the following. (i) The current equilibrium real output and price level, labeled. Y 1 (ii) The full-employment output, labeled.
PRINCIPLES OF MACROECONOMICS. INSTRUCTOR: JAMES SONDGEROTH . For the essay and multiple choice parts of the exam, students will be allowed to use one sheet of paper (8.5 X 11) with handwritten notes on both sides of it. This information sheet must be turned in with the exam. Answers to the essay questions must be written in a Blue Book.
2020 Exam Sample Question 1: Two Short Questions. (Questions taken from: 2011 and 2003 AP® Macroeconomics Exams) Allotted time: 25 minutes (plus 5 minutes to submit) 2009 Quantity. 2009 Price (base year) 2010 Quantity. 2010 Price. Food.
Solution 12. We use the equation MV = PY, rearranging it to V = PY/M, where P = 30, M = 440000, and Y = 20000. Thus, V = 30*20000/440000 = V = 1.363636363636. Problem 13. The government of Assumptionland (with economic conditions as described in Problem 12) decides to increase the money supply by a factor of 1.43.
AP® Economics Macro Exam SECTION I: Multiple-Choice Questions DO NOT OPEN THIS BOOKLET UNTIL YOU ARE TOLD TO DO SO. Instructions Section I of this examination contains 60 multiple-choice questions. Fill in only the ovals for numbers 1 through 60 on your answer sheet. Indicate all of your answers to the multiple-choice questions on the answer ...
ECON 3010 Intermediate Macroeconomics . Final Exam . Multiple Choice Questions. (60 points; 3 pts each) #1. Deflation occurs when: a. the unemployment rate decreases. ... Problem Solving / Essay Questions. (120 points) #21. (30 pts) Consider a macroeconomy that produces two goods.
Introduction to Demand and Supply; 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services; 3.2 Shifts in Demand and Supply for Goods and Services; 3.3 Changes in Equilibrium Price and Quantity: The Four-Step Process; 3.4 Price Ceilings and Price Floors; 3.5 Demand, Supply, and Efficiency; Key Terms; Key Concepts and Summary; Self-Check Questions; Review Questions
Essay questions 1 The diagram below shows typical production possibility curves (PPCs). B 1 B 2 B 3 B 4 B 5 PPC 1 PPC 2 X Y Z A 1 A 4 A 5 A 3 A 2 0 Good B Good A Figure A1.2 Production Possibility Curves PPC 1 shows the various possible combinations of the two goods, A and B, that can be produced. Any point on this curve is the maximum possible output when all available resources are fully
You will only earn credit for what you write in the separate Free Response booklet. 1. Assume the United States economy is in short-run macroeconomic equilibrium at an output level greater than potential output. Draw a correctly labeled graph of the aggregate demand, short-run aggregate supply, and long-run aggregate supply curves, and show ...
Multiple-choice questions are represented as the most popular testing format. The advantages of multiple-choice questions include low grading costs, perceived objectivity and availability of comparative analysis. The authors have developed multiple-choice tests, which measure students' knowledge at three first levels of understanding economics.
Humorous. Top 10 Reasons For Studying Economics. Inflation explained by Victor Borge. Funny Exam Answers. Humorous look at Subprime crisis. A collection of macro-economic essays on topics Inflation, Economic growth, government borrowing, balance of payments. Evaluation and critical analysis of all latest issues of the current day.
Work through dozens of challening exam questions on these AP Macroeconomics practice tests. Includes AP Macro multiple choice and free response questions. ... This PDF practice test includes 60 questions along with an answer key. Covers a lot of important concepts. ... Select a chapter then "Tutorial Quiz." McConnell Textbook Quizzes ...
Economics Revision Essay Plans. This series of resources provides revision essay plans for a wide variety of essay topics, including synoptic questions. For the 2019 papers check out our collection of videos on building A* evaluation into your answers. Have you tried our series of more than 50 Quizlet revision activities?
1. The economy of Alpha is in short-run equilibrium with a cyclical unemployment rate of 3%, a frictional unemployment rate of 4%, and an actual unemployment rate of 8%. (a) Calculate Alpha's natural rate of unemployment. Show your work. (b) Draw a correctly labeled graph of the aggregate demand, short-run aggregate supply, and long-run ...
Use graphs to answer these questions. 2. Substitutes and complements. Good A and good B are related to each other, either being substitutes or comple-ments. Now the price of good B rises. Illustrate the impact on the market for good A (with graphs) if. A and B are substitutes; A and B are complements. Minimum price.
A Level Economics. Our extensive collection of resources is the perfect tool for students aiming to ace their exams and for teachers seeking reliable resources to support their students' learning journey. Here, you'll find an array of revision notes, topic questions, fully explained model answers, past exam papers and more, meticulously ...