In one hour, Country X can make 12 hats or 4 radios, and Country Y can make 6 hats or 3 radios. Which statement is correct?
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About this test
This is a free 15-question sampler in the style of the AP Macroeconomics multiple-choice section, written by the StudyPDF team to the six units of the published course. It covers GDP, unemployment and inflation, the AD-AS model, the money market and monetary policy, fiscal policy and crowding out, the Phillips curve and the open economy, and it mixes multiple choice, select all that apply and fill in the blank. Answer all 15, then check your score and read the worked explanation for every question.
All 15 questions at a glance
Prefer to read before you play? Every question in the sampler is listed below. Answers and explanations stay collapsed until you open them.
1.In one hour, Country X can make 12 hats or 4 radios, and Country Y can make 6 hats or 3 radios. Which statement is correct?
- A. Country X has a comparative advantage in both goods because it can make more of each
- B. Country X has a comparative advantage in hats, and Country Y has a comparative advantage in radios
- C. Country Y has a comparative advantage in hats because its opportunity cost of a radio is lower
- D. Neither country gains from trade, since Country X is better at making both goods
Answer: B. Country X has a comparative advantage in hats, and Country Y has a comparative advantage in radios
Compare opportunity costs, not output. Country X gives up 1/3 of a radio for each hat and 3 hats for each radio. Country Y gives up 1/2 of a radio for each hat and 2 hats for each radio. X has the lower opportunity cost of hats, and Y has the lower opportunity cost of radios, so each has a comparative advantage in one good. Country X has an absolute advantage in both goods, but that does not stop trade from helping both countries when each specializes where its opportunity cost is lower.
2.Which of these are counted in this year's US GDP?
Select all that apply.
- A. A haircut sold this year
- B. The resale of a used car between two households
- C. A new house completed and sold this year
- D. Steel bought by a car maker to build the cars it sells this year
- E. A Social Security payment to a retiree
- F. A car assembled this year in a US plant owned by a foreign company
Answer: A. A haircut sold this year, C. A new house completed and sold this year, F. A car assembled this year in a US plant owned by a foreign company
GDP counts the market value of final goods and services produced within a country's borders in a year. A haircut is a final service, a new house is counted as investment in the year it is built, and a car assembled in the US counts even though the owner is foreign, because GDP is about where production happens. A used car was counted when it was new, steel bought to make cars is an intermediate good whose value is already in the price of the car, and a Social Security payment is a transfer, not payment for current production.
3.Nominal GDP rises from $10 trillion to $11 trillion while the GDP deflator rises from 100 to 112. What happened to real GDP?
- A. It rose by 10 percent, the same as nominal GDP
- B. It rose, because nominal GDP rose
- C. It fell, because prices rose faster than nominal GDP
- D. It cannot be determined without the population
Answer: C. It fell, because prices rose faster than nominal GDP
Real GDP is nominal GDP divided by the price index, with the index written as a decimal. Here that is 11 trillion divided by 1.12, about 9.8 trillion, compared with 10 trillion at the start (where the deflator was 100, so real and nominal were equal). Nominal GDP grew 10 percent, but prices grew 12 percent, so the increase was more than eaten up by inflation and real output fell by roughly 2 percent. A rising nominal figure alone never tells you that output grew.
4.An economy is at full employment, with real GDP equal to potential output. Which statement about unemployment is correct?
- A. Unemployment is zero
- B. Frictional and structural unemployment still exist, and cyclical unemployment is zero
- C. Only cyclical unemployment exists
- D. Only frictional unemployment exists
Answer: B. Frictional and structural unemployment still exist, and cyclical unemployment is zero
Full employment does not mean zero unemployment. The natural rate of unemployment is the sum of frictional unemployment (people between jobs or just entering the labor force) and structural unemployment (a mismatch between workers' skills or location and the jobs available). Cyclical unemployment is the part caused by a downturn, and it is zero when output is at potential. Cyclical unemployment shows up when real GDP is below potential, and it goes negative when output is above it.
5.Complete the sentence.
A market basket costs $200 in the base year and $230 this year. The price index this year is _____, so the inflation rate over the period is _____.
Options for blank 1: 87, 115, 130, 230
Options for blank 2: 15 percent, 13 percent, 30 percent, 115 percent
Answer: 115, 15 percent
A price index is the cost of the basket this year divided by its cost in the base year, times 100: 230 / 200 x 100 = 115. The inflation rate is the percent change in the index, (115 - 100) / 100 = 15 percent. The value 13 percent divides the $30 increase by the new price instead of the old one, 87 flips the ratio upside down, and 115 percent confuses the index level with the rate of change.
6.Which events would shift the aggregate demand curve to the right?
Select all that apply.
- A. A fall in the price level
- B. A rise in consumer confidence
- C. A rise in government purchases
- D. A depreciation of the dollar that raises net exports
- E. A rise in the price of oil
Answer: B. A rise in consumer confidence, C. A rise in government purchases, D. A depreciation of the dollar that raises net exports
Aggregate demand is consumption plus investment plus government purchases plus net exports at each price level. Higher consumer confidence raises consumption, more government purchases add directly, and a cheaper dollar makes exports more attractive and imports less so, which raises net exports. A fall in the price level is a movement along the same AD curve, not a shift. A higher oil price raises production costs and shifts short-run aggregate supply to the left, which is a different curve entirely.
7.A sharp rise in oil prices raises production costs across the economy. With aggregate demand unchanged, what is the short-run effect in the AD-AS model?
- A. The price level rises and real GDP falls
- B. The price level falls and real GDP rises
- C. The price level and real GDP both rise
- D. The price level rises and real GDP is unchanged
Answer: A. The price level rises and real GDP falls
Higher input costs shift short-run aggregate supply to the left. Along an unchanged downward-sloping AD curve, the new intersection has a higher price level and a lower real GDP, which means unemployment rises while prices rise. This combination of falling output and rising prices is called stagflation. A demand-side change cannot produce it, because a shift of AD moves the price level and output in the same direction.
8.The marginal propensity to consume is 0.8. Prices are fixed and the economy has plenty of idle capacity. Government purchases rise by $50 billion. What is the maximum increase in real GDP?
- A. $40 billion
- B. $62.5 billion
- C. $200 billion
- D. $250 billion
Answer: D. $250 billion
The spending multiplier is 1 / (1 - MPC) = 1 / 0.2 = 5, so the $50 billion increase can raise real GDP by up to 5 x 50 = $250 billion. It is a maximum because the calculation ignores things that shrink the effect, such as taxes, imports and crowding out. The value $40 billion is just 0.8 x 50, the first round of induced spending. The value $62.5 billion divides by the MPC instead of multiplying by the multiplier, and $200 billion uses the MPC / (1 - MPC) figure that applies to a tax change.
9.In the money market, the nominal interest rate rises along a fixed money demand curve. What happens to the quantity of money demanded, and why?
- A. It rises, because savers want to hold more money when rates are high
- B. It is unchanged, because money demand depends only on income
- C. It falls, because holding money costs more in forgone interest
- D. It falls, because the central bank has reduced the money supply
Answer: C. It falls, because holding money costs more in forgone interest
The interest rate is the opportunity cost of holding money: cash and checking balances earn little or nothing, while bonds earn the market rate. A higher rate makes money more costly to hold, so people hold less of it, and the quantity demanded falls along a downward-sloping demand curve. A change in income or the price level would shift the curve instead. The money supply is a separate curve, and a move along demand does not need it to change.
10.To fight a recession, the central bank buys government bonds from banks in an open market purchase. What is the expected chain of effects?
- A. Bank reserves fall, the interest rate rises, investment falls and AD shifts left
- B. Bank reserves rise, the nominal interest rate falls, investment rises and AD shifts right
- C. Bank reserves rise, the interest rate rises, investment rises and AD shifts right
- D. The money supply falls, the interest rate rises, and the price level falls
Answer: B. Bank reserves rise, the nominal interest rate falls, investment rises and AD shifts right
The central bank pays for the bonds with new reserves, so banks have more to lend and the money supply grows. In the money market graph, the supply curve shifts right and the nominal interest rate falls. Cheaper borrowing raises investment and interest-sensitive consumption, which shifts aggregate demand to the right and raises real GDP and the price level. The first and last options describe contractionary policy, which is what a bond sale does.
11.Complete the sentence.
With a required reserve ratio of 10 percent, the simple money multiplier is _____, so a bank holding $500 in excess reserves can support a maximum increase in the money supply of _____.
Options for blank 1: 5, 10, 20, 0.1
Options for blank 2: $50, $500, $5,000, $50,000
Answer: 10, $5,000
The simple money multiplier is 1 divided by the reserve ratio: 1 / 0.10 = 10. Excess reserves of $500 can therefore support up to 500 x 10 = $5,000 of new money, as loans are made, spent and redeposited and each bank keeps 10 percent. The number 0.1 is the reserve ratio itself, not its reciprocal. It is a maximum because in practice banks may hold extra reserves and people may hold cash instead of depositing it.
12.In the loanable funds market, the government borrows more to finance a larger budget deficit. Which statement describes crowding out?
- A. The real interest rate rises, which reduces private investment
- B. The real interest rate falls, which raises private investment
- C. Private saving rises enough to offset the deficit without any change in interest rates
- D. The money supply falls, which lowers the price level
Answer: A. The real interest rate rises, which reduces private investment
More government borrowing raises the demand for loanable funds. With the supply of saving unchanged, the real interest rate rises, and some firms drop investment projects that no longer pay off. That reduction in private investment is the crowding out. It is also why a deficit can weaken long-run growth, since less investment means a smaller capital stock over time. The money supply is a different market and plays no part in this story.
13.Expansionary policy pushes unemployment below the natural rate along a short-run Phillips curve. As workers and firms come to expect higher inflation, what happens?
- A. The economy slides down the same curve to lower inflation and lower unemployment
- B. The long-run Phillips curve shifts to the right
- C. Unemployment stays below the natural rate as long as inflation stays steady
- D. The short-run Phillips curve shifts up, and unemployment returns to the natural rate at a higher inflation rate
Answer: D. The short-run Phillips curve shifts up, and unemployment returns to the natural rate at a higher inflation rate
The short-run Phillips curve is drawn for a given level of expected inflation. When expectations catch up, nominal wages and prices adjust, the curve shifts up, and unemployment drifts back to the natural rate while inflation stays higher. That is why the long-run Phillips curve is vertical at the natural rate: there is no lasting trade-off between inflation and unemployment. The long-run curve moves only when the natural rate itself changes.
14.Complete the sentence.
If US real interest rates rise relative to the rest of the world, financial capital flows into the US, the dollar _____, and US net exports _____.
Options for blank 1: appreciates, depreciates, is unaffected, is devalued
Options for blank 2: rise, fall, stay the same, cannot be determined
Answer: appreciates, fall
Higher US returns attract foreign investors, who must buy dollars to invest, so the demand for dollars rises and the dollar appreciates. A stronger dollar makes US goods more expensive abroad and foreign goods cheaper at home, so exports fall, imports rise and net exports fall. Devaluation is a word for a deliberate cut in a fixed exchange rate, not for a market-driven change in a floating one.
15.The US dollar appreciates against the euro. Which effects follow, other things equal?
Select all that apply.
- A. US goods become more expensive for buyers in the euro area
- B. European goods become cheaper for US buyers
- C. US net exports tend to fall
- D. US net exports tend to rise
- E. It takes more dollars to buy one euro
Answer: A. US goods become more expensive for buyers in the euro area, B. European goods become cheaper for US buyers, C. US net exports tend to fall
When the dollar appreciates, each dollar buys more euros. A US product with an unchanged dollar price now costs euro-area buyers more euros, so they buy fewer. A European product with an unchanged euro price now costs US buyers fewer dollars, so they buy more. Exports fall and imports rise, so net exports fall. It takes fewer dollars, not more, to buy one euro, which is the same fact seen from the other side.
What the AP Macroeconomics exam looks like and how it is weighted
The AP Macroeconomics exam is scored 1 to 5. According to the College Board, it is a hybrid digital exam: you read the multiple-choice questions and the free-response prompts in the Bluebook app, and you handwrite your free-response answers in a paper booklet. Section I is 60 multiple-choice questions in 1 hour 10 minutes and counts for about two thirds of your score. Section II is 3 free-response questions in 1 hour, including a 10-minute reading period, and counts for about one third. One of the three is a long question worth half of the section, and the two short ones are worth a quarter each. A calculator is allowed. The College Board lists the 2027 exam for Friday, May 7, but check AP Central for your own year, because dates and details can change.
The course has six units, and the College Board publishes how much of the multiple-choice section each one gets. Basic Economic Concepts is 5 to 10 percent, Economic Indicators and the Business Cycle 12 to 17, National Income and Price Determination 17 to 27, Financial Sector 18 to 23, Long-Run Consequences of Stabilization Policies 20 to 30, and Open Economy 10 to 13. Units 3, 4 and 5 together carry more than half of the multiple-choice section, and they are where the AD-AS model, the money market, fiscal policy, the Phillips curve and loanable funds all live. If you only have time for part of the course, start there.
A 5 is the top score, but what a score earns is up to each college. Some give credit for a 3, many ask for a 4 or a 5, and policies differ by school. Look up the colleges you care about before you decide how hard to push.
How to use this sampler, and how to take it on paper
The 15 questions follow the unit weights loosely: one on basic concepts and comparative advantage, four on indicators and the business cycle, three on aggregate demand and supply, three on money and monetary policy, two on the Phillips curve and crowding out, and two on exchange rates. Most of them ask you to reason through a graph in words, because that is what the multiple-choice section does. Which curve shifts, which way, and what happens to the price level and real output.
Take it in one sitting with scratch paper. Sketch the AD-AS, money market or loanable funds graph before you pick an answer, even when no graph is shown, because a quick sketch catches most of the shifts you would otherwise get backward. Then read the explanation for every question, including the ones you got right. Treat a miss as a topic. If you missed the oil price question and the Phillips curve question, the gap is probably the difference between a shift of short-run aggregate supply and a movement along a curve. Math is written in plain text here.
If you would rather work on paper, use the Download test as PDF button above the questions. The file has all 15 questions with an answer key on the last page and needs a free StudyPDF account. The questions are original and written to the published course outline. They are not released exam questions, and this sampler does not practice the free-response section. For that, work through the College Board's released free-response questions and score yourself against the published scoring guidelines. Those questions reward labeled graphs, a clear direction for every change and an explanation in a sentence or two.
How StudyPDF builds AP Macroeconomics practice tests from your class notes
Fifteen questions can show you which unit is shaky. They cannot get you ready on their own, and a generic bank rarely matches the graphs, examples and vocabulary your teacher actually uses.
StudyPDF works from your material instead. Upload your textbook chapters, your teacher's slides, a worked problem set or your review packet, press New material, and StudyPDF builds practice tests from those exact pages. Every question is grounded in your material and every explanation cites where the answer comes from, so you can go straight back to the page when a step does not make sense.
You do not need to upload anything to start. Name a topic instead, for example the AD-AS model or the money market, and Bo sets it up with its key concepts so you can build quizzes and flashcards on it. Your results track which concepts you keep missing, so the next practice test can target them. Starting is free.
Written by the StudyPDF team. Last updated August 19, 2026.
Good to know
Is this AP Macroeconomics practice test free?
Yes. All 15 questions, the score screen and every worked explanation are free, and the quiz runs in your browser. A free StudyPDF account is needed to download the test as a PDF with an answer key or to build more practice tests from your own notes.
Who wrote these questions?
The StudyPDF team wrote every question and explanation, following the six units of the published AP Macroeconomics course outline. They are original items, not real or released exam questions, and StudyPDF is not affiliated with the College Board, which does not endorse this page.
Does this cover the free-response section?
No. The sampler practices the multiple-choice style only. The free-response section asks you to label graphs, state the direction of each change and explain it in writing, so work through the College Board's released free-response questions and the scoring guidelines for that part.
Can I get practice tests built from my own class materials?
Yes. Upload your textbook chapters, slides, problem sets or review packet to StudyPDF and you can build practice tests from those exact pages, with explanations tied to your sources. If you have nothing to upload, name a topic or a unit instead.