AP Macroeconomics FRQ Room

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AP Macroeconomics Free Response Questions

The best way to get better at FRQs is practice. Browse through dozens of practice AP Macroeconomics FRQs to get ready for the big day.

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  • Unit 1: Basic Economic Concepts (36)
  • Unit 2: Economic Indicators and the Business Cycle (47)
  • Unit 3: National Income and Price Determination (40)
  • Unit 4: Financial Sector (36)
  • Unit 5: Long-Run Consequences of Stabilization Policies (38)
  • Unit 6: Open Economy—International Trade and Finance (53)
Unit 1: Basic Economic Concepts

Aggregate Demand and Aggregate Supply Impacts on Macroeconomic Stability

This question requires you to analyze macroeconomic stability using the AD-AS framework.

Hard

Analyzing Demand Curve Shifts with Price Elasticity

This question examines the differences between movements along a demand curve and shifts in the dema

Hard

Changes in Demand: The Impact of Consumer Preferences

This question examines how shifts in consumer preferences can alter demand and market equilibrium th

Easy

Comparative Analysis of Macro and Microeconomics

This question explores the differences between macroeconomics and microeconomics and examines their

Medium

Comprehensive Review of Basic Economic Concepts

This comprehensive question integrates multiple basic economic concepts including scarcity, opportun

Extreme

Demand Determinants Analysis

This question focuses on the determinants of demand and their effects on market equilibrium. Answer

Easy

Determinants of Supply and Shifting Curves

This question focuses on understanding the determinants of supply and the difference between movemen

Easy

Economic Growth and Recession

This question requires you to analyze economic growth and recession using macroeconomic indicators.

Hard

Economic Growth and Shifts in LRAS

Analyze how technological improvements can lead to economic growth, using the AD-AS framework to ill

Hard

Factors of Production and Economic Growth

This question focuses on identifying the factors of production and understanding how improvements in

Medium

FRQ 4: Market Equilibrium and Supply Shock Analysis

Analyze the impact of a supply shock on market equilibrium by applying supply and demand concepts us

Hard

FRQ 7: Macro vs. Micro Economics in Decision-Making

Contrast macroeconomics and microeconomics by discussing how each perspective analyzes economic deci

Easy

FRQ 17: Impact of a Supply Shock on Aggregate Output and Prices

Apply aggregate demand and aggregate supply analysis to evaluate the short-run and long-run effects

Hard

FRQ 18: Evaluating Efficiency and Economic Growth through the PPC

Using the provided PPC graph, examine issues of productive and allocative efficiency, and analyze sh

Medium

Government Intervention: Price Floors and Market Equilibrium

This question investigates the effects of government-imposed price floors on market equilibrium.

Medium

Government Taxation and Market Outcomes

Examine the effects of a per-unit tax on a competitive market through both a diagrammatic and analyt

Medium

Interpreting the PPC Slope and Opportunity Cost

The slope of a Production Possibilities Curve (PPC) is a measure of opportunity cost. Suppose a PPC

Hard

Long-run vs. Short-run Adjustments in Macroeconomics

This question requires you to compare short-run and long-run adjustments following an adverse econom

Hard

Macroeconomic vs. Microeconomic Perspectives

This question asks you to differentiate between the fields of macroeconomics and microeconomics and

Easy

Market Disequilibrium Analysis during Price Controls

This question explores how government-imposed price controls, such as price ceilings or floors, lead

Hard

Market Equilibrium Analysis in a Consumer Goods Market

Using a demand and supply framework, analyze how an increase in consumer incomes affects the market

Easy

Money Demand and Supply Analysis

Analyze the effects of an increase in money demand on the money market equilibrium. Consider the imp

Hard

Natural Resources Scarcity and Economic Decisions

This question examines how the scarcity of natural resources influences production decisions and tra

Medium

Opportunity Cost Calculation Problem

This question tests your understanding of opportunity cost. Answer each part with definitions, calcu

Easy

Opportunity Cost in Personal and Economic Decisions

This question explores the concept of opportunity cost in the context of individual decision making

Easy

PPC and Opportunity Cost Analysis

Using the Production Possibilities Curve (PPC), analyze opportunity costs in an economy that produce

Medium

Production Possibility Curve, Economic Growth, and Efficiency

Examine the production possibilities of an economy that produces two goods: Good A and Good B.

Hard

Real-life Trade-Offs and Resource Allocation

This question asks you to consider the real-world implications of trade-offs and resource allocation

Easy

Scarcity and Opportunity Cost in Resource Allocation

This question evaluates your understanding of the concepts of scarcity and opportunity cost as they

Easy

Scarcity and Opportunity Costs Calculation

This question focuses on the fundamental concepts of economic scarcity, opportunity cost, and trade-

Easy

Shifts in the Demand Curve: Causes and Effects

This question assesses your understanding of the determinants that cause shifts in the demand curve

Medium

Supply Analysis and Shifts

Analyze the determinants of supply and the impact of factors such as technology on the supply curve.

Medium

Supply Shock and AD-AS Model

A sudden spike in oil prices leads to a negative supply shock in the economy. Analyze the effects of

Hard

Tax Implications on Supply Decisions in the Tobacco Industry

Consider a scenario where the government imposes an excise tax on tobacco products. This tax increas

Hard

Technology and Supply: Market Response

In this question, analyze the impact of a technological breakthrough on the supply side of a market.

Easy

Understanding Market Disequilibrium: Surpluses and Shortages

This question explores market disequilibrium through the analysis of surpluses and shortages using p

Easy
Unit 2: Economic Indicators and the Business Cycle

Aggregate Income and National Income

National income can be calculated from both the aggregate income approach and the aggregate spending

Hard

Analyzing the Circular Flow Model and GDP Computation

This question asks you to analyze the circular flow model, compute GDP in a closed economy, and disc

Medium

Assessing Economic Growth Using GDP Components

The components of GDP provide insight into the health of an economy. Answer the following: Part A:

Medium

Business Cycle Analysis: AD-AS Model

Interpret an AD-AS graph to demonstrate different phases of the business cycle and analyze changes i

Hard

Business Cycle Dynamics and Fiscal Policy Response

Examine the phases of the business cycle using the provided real GDP graph and propose appropriate f

Hard

Business Cycle Phases and Policy Implications

Analyze the phases of the business cycle and propose appropriate economic policies for each phase. U

Hard

Business Cycles Analysis

Describe the phases of the business cycle and analyze how these phases reflect changes in economic a

Easy

Business Cycles and Economic Policy

This question requires you to describe the phases of the business cycle, analyze economic data indic

Hard

Business Cycles and Monetary Policy Response

Examine the phases of the business cycle and analyze how monetary policy can be used to mitigate the

Medium

Business Cycles: Identification and Analysis

This question asks you to identify and analyze the phases of the business cycle, including interpret

Hard

Calculating the Inflation Rate Using CPI

Using data from the Consumer Price Index (CPI), compute the annual inflation rate and discuss potent

Easy

Circular Flow and GDP: Understanding Economic Activity

This question involves analyzing the circular flow model of economic activity and its relationship t

Easy

Circular Flow Model and GDP Calculation

This question focuses on the basic circular flow diagram and GDP calculation in a closed economy.

Easy

Comprehensive Business Cycle Analysis

Analyze a complex business cycle graph and propose policy recommendations based on cyclical changes.

Extreme

Costs Associated with Inflation

Explain the concept of inflation costs with an emphasis on menu costs and shoe-leather costs.

Medium

Costs of Inflation: Menu and Shoe-leather Costs

Discuss the economic costs of inflation with a focus on menu costs and shoe-leather costs. Analyze h

Medium

Cyclical Unemployment and Policy Intervention

In a cyclical downturn, unemployment rises significantly. Suppose in an economy, the natural rate of

Medium

Differentiating Types of Unemployment

Examine different forms of unemployment and illustrate how they manifest in the economy.

Medium

Effects of Expected vs Unexpected Inflation

Differentiate between expected and unexpected inflation, and analyze how each type impacts various e

Easy

Effects of Unexpected Inflation on Economic Agents

Unexpected inflation can have varied effects on different groups in the economy. Answer the followin

Medium

Evaluating Aggregate Income vs. Aggregate Spending

Critically analyze the relationship between aggregate income and aggregate spending in GDP measureme

Medium

Expanding the Circular Flow Model: Introducing the Foreign Sector

This question extends your understanding of the circular flow model by incorporating the foreign sec

Easy

Fiscal Policy and Real GDP: A Multiplier Analysis

This question requires you to explain the fiscal multiplier concept, perform a calculation using giv

Medium

Fiscal Policy Impact on GDP Components

Consider an economy where the government increases its spending by $100 billion. Using the expenditu

Medium

GDP by Expenditure vs. Income Approaches

Compare and contrast the expenditure and income approaches to measuring GDP. Discuss why these two m

Medium

GDP Deflator and Price Level Analysis

Apply the GDP deflator in calculating real GDP and discuss its advantages over the CPI as a measure

Medium

Implications of Price Indices on Social Welfare

Price indices such as the CPI play a crucial role in social welfare, especially in the context of wa

Hard

Incorporating the Foreign Sector in Circular Flow

Analyze the extended circular flow model by incorporating the foreign sector and its impact on GDP.

Medium

Increase in Government Spending and Its Multiplier Effect

This question assesses your understanding of the multiplier effect in the context of government spen

Medium

Inflation Expectations and Interest Rates

Analyze the relationship between expected inflation and nominal interest rates. Use the equation $$\

Hard

Investment Spending and Future Economic Growth

Investment spending is a crucial component of GDP that influences future economic growth. Answer the

Hard

Investment Spending and the Multiplier Effect

Examine how changes in investment spending can have amplified effects on the economy through the mul

Hard

Labor Force Participation Analysis

Examine how labor force participation is measured and the effects that discouraged workers can have

Easy

Labor Force Participation and Demographic Changes

Analyze how demographic shifts affect labor force participation rates (LFPR) and discuss the economi

Medium

Limitations of GDP as a Measure of Economic Well-being

GDP is often used as an indicator of economic health, but it has limitations. Answer the following:

Medium

Measuring Inflation with the CPI

Calculate the annual inflation rate using CPI data and discuss one limitation of the CPI as a measur

Easy

Measuring Unemployment and the Effects of Discouraged Workers

This question addresses the measurement of the unemployment rate, the role of discouraged workers, a

Medium

Net Exports and Their Role in GDP

Evaluate the role of net exports in the GDP calculation and discuss how changes in net exports refle

Medium

Nominal and Real Interest Rates: Understanding the Fisher Equation

Utilize the Fisher equation to illustrate the relationship between nominal and real interest rates,

Medium

Nominal vs. Real Income: Analysis of Purchasing Power

Examine the differences between nominal and real income. Calculate the effect of inflation on real i

Medium

Price Indices: Calculation and Limitations

Consider a market basket with the following items for the base year and current year: Base Year: Bre

Hard

Real Income and Purchasing Power

Explain the significance of real income in economic analysis. Calculate real income from given nomin

Medium

The Impact of Consumer Spending on GDP

Analyze the effect of an increase in consumer spending on GDP and discuss multiplier effects.

Hard

The Shadow Economy’s Impact on GDP

This question examines the role of unreported economic activities (shadow economy) and their implica

Hard

Understanding the Business Cycle

The business cycle represents fluctuations in economic activity over time. Analyze the phases of the

Easy

Unemployment Measurement and Analysis

Accurately measuring unemployment is critical for understanding economic health. Use the data and co

Medium

Unemployment Rate Calculation and Analysis

Understanding unemployment statistics is critical to macroeconomic analysis. Answer the following:

Easy
Unit 3: National Income and Price Determination

Aggregate Demand and Fiscal Policy Impact

This question examines how expansionary fiscal policy impacts macroeconomic equilibrium using the AD

Medium

Automatic Stabilizers: Their Role and Impact

Examine the concept of automatic stabilizers in fiscal policy. Discuss how they operate during econo

Easy

Components of Aggregate Demand and Economic Impacts

This question assesses your understanding of the components of aggregate demand (AD) and how changes

Medium

Contractionary Fiscal Policy and Its Economic Impact

This question focuses on contractionary fiscal policy and its role in cooling an overheated economy.

Hard

Contractionary Shock and AD-AS Diagram Analysis

An economy operating at full employment experiences a 10% decrease in consumption spending due to de

Medium

Detailed Multiplier Analysis in a Fiscal Stimulus Scenario

This question challenges you to perform multiplier calculations and analyze the effects of a fiscal

Hard

Discretionary Fiscal Policy and Its Lags

Discretionary fiscal policy often suffers from implementation lags. Evaluate how these lags can affe

Medium

Dynamic Adjustment of the Economy in Response to Fiscal Stimuli

Analyze the dynamic process by which an initial fiscal stimulus propagates through the economy, and

Hard

Effects of a Positive Technological Shock on the Economy

A sudden technological breakthrough increases productivity across multiple industries. Analyze how t

Medium

Effects of Exchange Rates on Net Exports

Analyze the relationship between exchange rates and net exports, and assess how fiscal policy can in

Hard

Fiscal Policy and Net Exports Impact

Analyze the impact of an expansionary fiscal policy on domestic economic activity and international

Hard

Fiscal Policy and the Tax Multiplier

This problem focuses on the tax multiplier within the framework of fiscal policy. (a) Define the ta

Hard

Fiscal Policy Measures to Close a Recessionary Gap

This question examines the use of expansionary fiscal policy to close a recessionary gap in an econo

Hard

Fiscal Policy Multiplier and Its Limitations

Discuss the concept of the fiscal (spending) multiplier, calculate its value, and analyze why the ac

Hard

Fiscal Stimulus and Spending Multipliers

Examine how a change in government spending affects aggregate output through the multiplier effect.

Hard

Foreign Sector and AD Shifts

This question investigates how international factors influence aggregate demand. (a) Explain the fo

Hard

FRQ 2: Spending Multiplier Analysis

Analyze the concept of the spending multiplier in the macroeconomy and determine its numerical value

Medium

FRQ 6: Long-Run Aggregate Supply and Economic Growth

This question focuses on the long-run aggregate supply (LRAS) and the determinants of economic growt

Medium

FRQ 6: Self-Adjustment Mechanism in Recessionary Gaps

Using economic theory, describe the self-adjustment process that enables an economy to move from a r

Hard

FRQ 10: Automatic Stabilizers and Economic Fluctuations

Automatic stabilizers play a crucial role in moderating economic fluctuations without deliberate pol

Medium

FRQ 16: Globalization and Net Exports

Globalization influences the net exports component of aggregate demand. Part A: Explain how fluctua

Easy

FRQ 18: Comparing Spending and Tax Multipliers with Numerical Example

This question explores the numerical relationships between spending and tax multipliers. Part A: If

Medium

FRQ 19: Automatic Stabilizers in Different Economic Conditions

This question evaluates your understanding of automatic stabilizers and how they operate in varying

Medium

FRQ 19: Policy Interventions during a Recession: Stimulus Approaches

Evaluate the role of expansionary fiscal policy in mitigating a recessionary gap, including calculat

Hard

Government Spending and Unemployment Reduction

Evaluate the role of increased government spending as a tool for reducing unemployment in an economy

Medium

Impact of a Natural Disaster on Aggregate Supply and Demand

This question examines the effects of a sudden natural disaster on the economy's aggregate supply an

Hard

Impact of Inflation on Various Economic Agents

In this problem, you will analyze a scenario with rising inflation and its effects on different part

Hard

Impact of Technology on Long-Run Aggregate Supply

Technological improvements can transform an economy's production capacity over time. (a) Describe h

Medium

Interrelationship Between Fiscal Policy and Monetary Policy Outcomes

Explore the interactions between fiscal and monetary policies and their combined effects on the AD-A

Medium

Multiplier Effects and Fiscal Policy Stimulus

Examine the operation of multiplier effects in fiscal policy. Use given parameters to calculate both

Medium

Multiplier Effects: Spending vs Tax Multipliers

Analyze the multiplier effect in the macroeconomy. Differentiate between the spending multiplier and

Medium

Multiplier Effects: Spending vs. Tax Cuts

This question requires you to compare the effects of spending multipliers and tax multipliers on agg

Hard

Output Gap Analysis via the AD-AS Model

An economy has a full-employment output (GDPf) of $2 trillion but is currently producing only $1.8 t

Medium

Recessionary and Inflationary Gaps and Self-Adjustment Mechanisms

Examine how the economy self-adjusts to recessionary and inflationary gaps using the AD-AS framework

Medium

Recessionary Gaps and the Role of Automatic Stabilizers

An economy facing a recessionary gap must stimulate growth without needing new legislative action. E

Medium

Short-Run Aggregate Supply and Demand Adjustments

Using the aggregate demand and aggregate supply (AD-AS) model, assess the impact of increased govern

Medium

The Impact of Transfer Payments on Aggregate Demand

This question explores how transfer payments, as automatic stabilizers, impact aggregate demand in t

Easy

The Role of Consumer Confidence in Aggregate Demand

Consumer confidence can significantly impact the aggregate demand in an economy. (a) Describe how c

Easy

Wage-Setting Behavior and Shifts in SRAS

Analyze how inflation expectations influence wage-setting behavior and subsequently shift the short-

Hard

Wealth Effect and Aggregate Demand

Discuss the impact of the wealth effect on aggregate demand. Explain how fluctuations in asset value

Medium
Unit 4: Financial Sector

Bond Pricing and the Inverse Relationship with Interest Rates

Bond prices and interest rates share an inverse relationship. Answer the following: (i) Explain why

Medium

Comparing Equity Financing and Debt Financing

Firms have options for raising funds through either equity or debt financing. Examine the following

Hard

Contractionary Monetary Policy and Economic Stabilization

Analyze the role and impacts of contractionary monetary policy in stabilizing the economy. Answer th

Medium

Deficit Spending and Loanable Funds Demand

This question focuses on how government deficit spending influences the demand for loanable funds. A

Hard

Digital Payments and Money Demand Shift

The growing adoption of digital payment systems may influence traditional measures of money demand.

Medium

Evaluating the Trade-Offs in Financial Investment Risk

This question examines how risk considerations influence investment decisions in the financial marke

Medium

Excess Reserves and Bank T-Accounts

Analyze the impact of excess reserves on the bank lending process and overall money creation.

Medium

Expansionary vs. Contractionary Monetary Policy

Monetary policy can be either expansionary or contractionary depending on economic conditions. In an

Medium

Fiscal Policy and the Foreign Exchange Market

Examine how specific fiscal policy actions can influence domestic economic activity and internationa

Extreme

Fractional Reserve Banking and the Money Multiplier

This question addresses fractional reserve banking, the money multiplier, and bank T-account analysi

Medium

FRQ 9: Expansionary Monetary Policy via Open Market Operations

Evaluate the impact of an open market purchase on the money supply and interest rates.

Medium

FRQ 12: Loanable Funds Market - Supply Shifters

Analyze the factors that drive changes in the supply of loanable funds and their impact on the marke

Medium

FRQ 14: Risk and Return in Financial Assets

Analyze how risk and liquidity influence the rate of return of financial assets.

Hard

Functions of Money in Daily Transactions

Money serves as a medium of exchange, a unit of account, and a store of value. Answer the following

Easy

Impact of Public Cash Holdings on the Money Multiplier

This question examines how increased public preference for holding cash affects the money multiplier

Medium

Inflation and Borrowing Costs

This question investigates how inflation influences nominal and real interest rates and the subseque

Easy

Inflation, Nominal Rates, and Real Investment Returns

This question investigates how inflation and interest rates interact and influence investment return

Medium

Integrated Financial Sector Analysis

This question integrates concepts from nominal and real interest rates, inflation, and monetary supp

Extreme

Investment Decisions in Financial Assets

A firm must decide between investing in physical assets and financial investments. Using the table p

Medium

Liquidity and Investment Choices

This question investigates how liquidity considerations affect an investor’s choice among different

Medium

Liquidity Preferences and Money Demand

This question examines the different components of money demand and how liquidity preferences affect

Medium

Loanable Funds and Future Expectations

This question assesses how expectations regarding future economic conditions affect the loanable fun

Medium

Loanable Funds Market Analysis

This question analyzes the demand and supply factors in the loanable funds market and how shifts in

Medium

Loanable Funds Market and Government Borrowing Impact

This question focuses on the impact of government borrowing on the loanable funds market. Consider a

Hard

Measurement of the Money Supply

Examine the definitions of M1 and M2 and discuss why the money supply is considered fixed at a given

Medium

Monetary Base and Its Role in Money Creation

This question examines the role of the monetary base in the money creation process. Answer the follo

Medium

Monetary Policy Tools: Discount Rate versus Reserve Ratio

Compare the effectiveness of adjusting the discount rate versus the reserve ratio as tools of moneta

Extreme

Money Creation through Bank Lending Process

Explain how money is created in a fractional reserve banking system through the process of bank lend

Easy

Money Multiplier and Reserve Requirement

This question examines the relationship between the reserve requirement and the money multiplier und

Medium

Nominal vs Real Interest Rate Dynamics

This question requires you to explore the relationship between nominal and real interest rates and t

Easy

Open Market Operations and the Money Supply

Open market operations (OMOs) are a primary tool used by the Federal Reserve to manage the money sup

Easy

Open Market Operations: Evaluating the Fed's Actions

Open market operations (OMOs) are a key tool for the Federal Reserve. Analyze a scenario where the F

Medium

Reserve Requirements and Economic Impact

Assess how changes in the reserve requirement affect bank lending and the broader economy.

Hard

The Discount Rate and Its Economic Impact

Examine the role of the discount rate as a monetary policy tool and its broader economic implication

Medium

The Impact of the Required Reserve Ratio on Money Creation

This question investigates how variations in the required reserve ratio influence the money multipli

Medium

The Role of Financial Assets in Monetary Policy

Financial assets are integral to the execution of monetary policy. Explore the following aspects:

Medium
Unit 5: Long-Run Consequences of Stabilization Policies

Adjustment to an Inflationary Gap

This question focuses on the adjustment process when an economy experiences an inflationary gap. An

Medium

Analysis of the Phillips Curve in a Recessionary Environment

An economy is in a recession with rising unemployment and falling inflation. Data indicates a moveme

Easy

Analyzing Stagflation and Policy Responses

Stagflation is a period when inflation and unemployment rise simultaneously. This situation poses a

Hard

Comparing Demand-Pull and Cost-Push Inflation

Inflation can be driven by demand-pull forces as well as cost-push pressures. Compare and contrast t

Hard

Crowding Out: Analyzing the Loanable Funds Market

Examine the effects of government budget deficits on the loanable funds market and private investmen

Hard

Deflation Dynamics and Policy Exit Strategies

Deflation can be as damaging as inflation, requiring prompt policy responses. In this question, you

Hard

Fiscal Deficit, National Debt, and Long-Run Growth

Examine the long-run implications of persistent fiscal deficits and a high national debt on economic

Hard

Fiscal Deficits, Borrowing, and the Crowding Out Effect

The government runs a significant budget deficit and finances it by borrowing funds in the loanable

Hard

Fiscal Deficits, National Debt, and Economic Growth

Examine the relationship between fiscal deficits, national debt, and long-run economic growth. (a)

Medium

Fiscal Policy Impacts in Different Economic Phases

Compare the effects of expansionary fiscal policy when an economy is in a recessionary gap versus wh

Hard

Fiscal Policy, Budget Deficits, and National Debt

Persistent budget deficits contribute to the national debt, affecting a country’s economic stability

Medium

FRQ 2: Fiscal Policy and Crowding Out

Examine the role of expansionary fiscal policy in a recession and its potential to crowd out private

Medium

FRQ 3: Coordination of Fiscal and Monetary Policies in Deep Recession

Evaluate how coordinated fiscal and monetary policies can be used in a deep recession to restore ful

Hard

FRQ 6: Supply-Side Fiscal Policy and Long-Run Economic Growth

Evaluate how supply-side fiscal policies promote long-run economic growth by shifting the long-run a

Hard

FRQ 9: Wage-Price Spiral and Double Shifts

Examine the concept of the wage-price spiral and how double shifts in aggregate demand (AD) and shor

Extreme

FRQ 14: Policy Coordination in a Changing Economic Environment

Analyze how fiscal and monetary policies can be coordinated to achieve both full employment and stab

Hard

FRQ 15: Long-Run Phillips Curve and the Natural Rate of Unemployment

Using the Phillips curve framework, explain why the long-run Phillips curve is vertical and discuss

Medium

Government Spending Multipliers and GDP Impact

Evaluate the concept of the government spending multiplier and its effect on overall economic output

Easy

Graphical Analysis of Demand-Pull Inflation

Illustrate and explain the process of demand-pull inflation using an AD-AS framework.

Easy

Impact of Human Capital Investment on Productivity and Growth

Discuss how investments in education and training can lead to improvements in workforce productivity

Easy

Impact of State and Local Deficits on National Economic Performance

During an economic recession, state and local governments increase their deficits. Analyze how this

Hard

Implications of a Balanced Budget Amendment on Fiscal Policy Flexibility

There is a proposal to adopt a balanced budget amendment that would require the government to balanc

Medium

Inflationary Gap Correction and Price Level Adjustment

An economy is operating above its full-employment level, resulting in an inflationary gap. In this q

Hard

Monetary Neutrality and Long-Run Supply Response

Economic theory posits that changes in the money supply do not affect real output in the long run (m

Medium

Monetary Neutrality and the Inflation Process

Using the Quantity Theory of Money and the concept of monetary neutrality, answer the following: (a

Hard

Monetary Policy and Economic Stabilization in Federal Systems

Effective monetary policy is crucial for economic stabilization, particularly when the central bank

Hard

Monetary Policy for Recessionary Gap Correction

An economy experiencing a recessionary gap sees the central bank increase the money supply by 20% to

Medium

Monetary Policy: Impact on Money Supply and Inflation

Consider an economy in which the central bank implements an expansionary monetary policy by increasi

Medium

Money Market Equilibrium and Policy Impacts on Interest Rates

Analyze how changes in the money supply affect interest rates using the money market framework.

Medium

Phillips Curve Analysis with Shifting Inflation Expectations

Analyze the relationship between unemployment and inflation using the Phillips curve, considering ch

Hard

Phillips Curve Analysis: Short-run vs Long-run Implications

Consider an economy experiencing demand-pull inflation. (a) Define the short-run Phillips Curve (SR

Medium

Phillips Curve and the Trade-Off Between Inflation and Unemployment

Examine the relationship between inflation and unemployment as illustrated by the Phillips curve. Yo

Medium

Policy Coordination: Balancing Fiscal and Monetary Actions

Evaluate how simultaneous fiscal and monetary policy adjustments can be coordinated to stabilize an

Medium

Public Debt, Interest Rates, and Private Investment: Exploring Crowding Out

High levels of public debt can have various impacts on the economy. Answer the following: (a) Descr

Hard

Quantity Theory of Money and the Effects of Money Supply Changes

Utilize the equation of exchange to analyze the impact of an increase in the money supply on the pri

Medium

Supply-Side Fiscal Policy and Long-Run Economic Growth

Evaluate how supply-side fiscal policy, such as reducing income taxes, can enhance long-run economic

Medium

Tax Incentives, Investment, and Long-run Economic Outcomes

Assume the government introduces significant tax cuts for businesses. (a) Describe how these tax in

Hard

Technology Shocks and Shifts in SRAS

Technological improvements can reduce production costs and shift the short-run aggregate supply curv

Easy
Unit 6: Open Economy—International Trade and Finance

Analyzing Balance of Payments Data

A country provides the following data for the year: • Goods and Services: Exports = $500 billion, I

Medium

Analyzing Short-Run Forex Market Adjustments

Examine a situation in which speculators cause shifts in the forex market. Use the provided graph to

Hard

Analyzing the Effects of Changing Relative Incomes on Exchange Rates

This FRQ examines how changes in relative incomes between countries can influence the exchange rate

Easy

Analyzing the U.S. Balance of Payments Account Deficit

This FRQ examines the components of the balance of payments accounts. The U.S. is experiencing a cur

Medium

Balance of Payments Statement Calculation

This question analyzes the components of the balance of payments. Use the provided table to answer t

Medium

Capital Account Dynamics in Open Economies

Analyze quarterly trends in the capital account and discuss their implications for the domestic curr

Medium

Case Study: U.S. Monetary Policy and the Dollar

In a scenario where the Federal Reserve adopts an expansionary monetary policy, examine the subseque

Hard

Central Bank Intervention in the Forex Market

Central banks sometimes intervene in the foreign exchange market to correct imbalances in the balanc

Extreme

Central Bank Monetary Policy Effects on Exchange Rates

A central bank increases the money supply as part of an expansionary monetary policy. Use the provid

Hard

Comparative Fiscal Policy Impacts on Exchange Rates

Evaluate how differences in fiscal policy between regions can impact exchange rates. Your answer sho

Extreme

Comparing Economic Effects: Tariffs vs. Quotas on Imports

Compare the economic implications of a tariff and a quota on imported cars using the case provided.

Medium

Currency Appreciation and Net Exports

Explore the relationship between currency appreciation and net exports. Address the following parts:

Easy

Currency Depreciation and Outbound Capital Flows

Discuss how a depreciated domestic currency influences outbound capital flows and suggest policy mea

Hard

Current Account Deficits and Capital Inflows

In a given fiscal year, the U.S. records a current account deficit of $150 billion and a capital acc

Medium

Domestic Interest Rates and Currency Supply

Analyze the relationship between domestic interest rates and the supply of the domestic currency in

Medium

Effects of Monetary Contraction on Domestic Markets

Analyze how a contractionary monetary policy affects domestic interest rates, capital flows, and the

Hard

Effects of Monetary Policy on Capital Flows

Investigate the relationship between domestic interest rate changes and international capital flows

Medium

Exchange Rate Fluctuations and Speculation

Evaluate how changes in exchange rates occur due to trade dynamics and speculative behavior. Refer t

Medium

Exchange Rate Impact on Net Exports

Discuss the impact of a depreciating domestic currency on net exports using the information from the

Medium

Exchange Rates and Inflation Dynamics

Examine the relationship between domestic inflation and exchange rate movements.

Medium

Fiscal Policy Effects on Exchange Rates

Analyze how fiscal policy can influence the exchange rate and aggregate demand. Your answer should c

Hard

Foreign Exchange Market Equilibrium Adjustments

Assess how speculative activities influence the equilibrium in the foreign exchange market and the r

Hard

Foreign Exchange Market Equilibrium Analysis

Consider the foreign exchange market where the U.S. dollar is traded for euros. Using supply and dem

Medium

Foreign Exchange Market Shocks and Policy Interventions

Analyze how a sudden shock in the foreign exchange market, such as a geopolitical crisis, affects th

Extreme

Foreign Tastes and Exchange Rate Movements

Changes in foreign consumer preferences can influence a country’s exchange rate. Analyze how a shift

Medium

FRQ 5: Tariff Impacts on Domestic Markets and the Forex Market

Analyze the multi-faceted effects of a protective tariff on a domestic market and its subsequent imp

Hard

FRQ 6: Quota Effects on Domestic Consumption and the Trade Balance

This question examines the effects of an import quota on domestic markets and the foreign exchange m

Hard

FRQ 7: Analysis of Inbound and Outbound Capital Flows

Capital flows are a key component of the international financial system. In this question, you will

Easy

FRQ 8: Official Reserves Adjustment and the Balance of Payments

Official reserves are used by central banks to balance out imbalances in the current and capital acc

Medium

FRQ 11: Speculative Behavior in the Foreign Exchange Market

Speculation can play a significant role in the foreign exchange market, often amplifying movements i

Hard

FRQ 12: Real Interest Rates and International Capital Flows

Real interest rates are crucial in determining international capital flows. This question requires y

Hard

FRQ 14: Depreciation of the Domestic Currency due to Fiscal Expansion

Expansionary fiscal policies can have counterintuitive effects on the exchange rate. In this questio

Hard

FRQ 14: Monetary Policy, Interest Rates, and Exchange Rate Transmission

Monetary policy has a direct impact on domestic interest rates, which in turn affect exchange rate d

Extreme

FRQ 18: Exchange Rate Adjustments and Official Reserves

Countries often use official reserves to manage imbalances in their balance of payments. This questi

Medium

Graphical Representation of Balance of Payments Trends

Analyze the relationship between the current account and the capital account as components of the ba

Medium

Impact of Tariffs on Domestic Markets and Exchange Rates

Examine the effects of a protective tariff on the domestic steel market and on the current account.

Medium

Inflation Differentials and the Impact on Real Interest Rates

Examine how differences in domestic and foreign inflation rates can influence real interest rates an

Medium

International Capital Flow Shifts Amid Global Crises

Investigate the effects of a global financial crisis on international capital flows and the exchange

Extreme

Long-run Adjustments to Exchange Rate Shifts

A depreciation of the U.S. dollar occurs suddenly, as depicted in the stimulus graph showing a decli

Hard

Monetary Policy and International Asset Flows

Discuss how expansionary monetary policy impacts domestic interest rates and subsequently influences

Hard

Monetary Policy Impact on Exchange Rates

An expansionary monetary policy, such as an increase in the money supply, can have significant effec

Medium

Monetary Policy's Influence on the Money Market and Exchange Rates

Evaluate the impact of an expansionary monetary policy on domestic interest rates and the foreign ex

Medium

Net Exports and Exchange Rate Volatility

Exchange rate volatility can impact a country’s net exports. Explain the mechanisms by which an appr

Hard

Real Interest Rates and Currency Strength

Higher real interest rates tend to attract foreign investment, influencing currency appreciation. Ex

Hard

Real Interest Rates and International Capital Flows

Assess how differences in real interest rates between two countries influence international capital

Medium

Real Interest Rates and International Capital Flows

This FRQ explores how differences in real interest rates influence international capital movements.

Hard

Relative Income and Exchange Rate Dynamics

National income differences can alter currency values. Explain how rising incomes in a foreign count

Medium

Role of Central Bank Interventions in Foreign Exchange Markets

This FRQ examines central bank interventions in the foreign exchange market and their implications f

Hard

Speculation Effects on Currency Valuation

Discuss the role of speculation in the foreign exchange market and how it can lead to rapid changes

Extreme

Tariff Impacts on Domestic Markets

A protective tariff is imposed on imported steel. The following graph displays the domestic supply a

Hard

Tariffs and International Trade

Tariffs are imposed to protect domestic industries but can have several unintended economic effects.

Medium

Tariffs and Quotas: Domestic and International Impacts

This FRQ examines the effects of trade policies on domestic markets and international trade flows by

Easy

The Role of Official Reserves in Balancing the BOP

Examine how official reserves are used by the central bank to balance the payments in the balance of

Medium

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FAQWe thought you might have some questions...
Where can I find practice free response questions for the AP Macroeconomics exam?
The free response section of each AP exam varies slightly, so you’ll definitely want to practice that before stepping into that exam room. Here are some free places to find practice FRQs :
  • Of course, make sure to run through College Board's past FRQ questions!
  • Once you’re done with those go through all the questions in the AP MacroeconomicsFree Response Room. You can answer the question and have it grade you against the rubric so you know exactly where to improve.
  • Reddit it also a great place to find AP free response questions that other students may have access to.
How do I practice for AP AP Macroeconomics Exam FRQs?
Once you’re done reviewing your study guides, find and bookmark all the free response questions you can find. The question above has some good places to look! while you’re going through them, simulate exam conditions by setting a timer that matches the time allowed on the actual exam. Time management is going to help you answer the FRQs on the real exam concisely when you’re in that time crunch.
What are some tips for AP Macroeconomics free response questions?
Before you start writing out your response, take a few minutes to outline the key points you want to make sure to touch on. This may seem like a waste of time, but it’s very helpful in making sure your response effectively addresses all the parts of the question. Once you do your practice free response questions, compare them to scoring guidelines and sample responses to identify areas for improvement. When you do the free response practice on the AP Macroeconomics Free Response Room, there’s an option to let it grade your response against the rubric and tell you exactly what you need to study more.
How do I answer AP Macroeconomics free-response questions?
Answering AP Macroeconomics free response questions the right way is all about practice! As you go through the AP AP Macroeconomics Free Response Room, treat it like a real exam and approach it this way so you stay calm during the actual exam. When you first see the question, take some time to process exactly what it’s asking. Make sure to also read through all the sub-parts in the question and re-read the main prompt, making sure to circle and underline any key information. This will help you allocate your time properly and also make sure you are hitting all the parts of the question. Before you answer each question, note down the key points you want to hit and evidence you want to use (where applicable). Once you have the skeleton of your response, writing it out will be quick, plus you won’t make any silly mistake in a rush and forget something important.