PrepGo

AP Macroeconomics Practice Quiz: Economic Growth

Written by AP Content Team, Verified for 2026 AP Exams, Last updated: May 2026

Test your understanding with short quizzes. This quiz has 16 questions to check your progress.

Question 1 of 16

According to the provided text, how is economic growth typically measured?

All Questions (16)

According to the provided text, how is economic growth typically measured?

A) As the growth rate in real GDP per capita over time.

B) As the annual change in the unemployment rate.

C) As the total value of aggregate output in a given year.

D) As the rate of inflation adjusted for employment.

Correct Answer: A

The content explicitly states that 'Economic growth can be measured as the growth rate in real GDP per capita over time.'

If a country's real GDP is $2 trillion and its population is 50 million, what is its real GDP per capita?

A) $4,000

B) $40,000

C) $400,000

D) $20,000

Correct Answer: B

Per capita GDP is calculated by dividing the real GDP by the population. $2,000,000,000,000 / 50,000,000 = $40,000.

An outward shift of a nation's Production Possibilities Curve (PPC) is analogous to which change in the AD-AS model?

A) A rightward shift of the aggregate demand curve.

B) A leftward shift of the short-run aggregate supply curve.

C) A rightward shift of the long-run aggregate supply (LRAS) curve.

D) A leftward shift of the long-run aggregate supply (LRAS) curve.

Correct Answer: C

The content states, 'An outward shift in the PPC is analogous to a rightward shift of the long-run aggregate supply curve.' Both represent an increase in the economy's potential output.

Which of the following is a primary determinant of labor productivity?

A) The rate of consumer spending.

B) The level of government purchases.

C) The quantity of physical capital per worker.

D) The overall price level.

Correct Answer: C

The text specifies that 'Productivity is determined by the level of technology and physical and human capital per worker.'

The aggregate production function describes a positive relationship between output per capita and which of the following?

A) The unemployment rate.

B) The general price level.

C) Human capital per capita.

D) The nominal interest rate.

Correct Answer: C

The content indicates that 'The aggregate production function shows that output per capita is positively related to both physical and human capital per capita.'

What is the definition of average labor productivity?

A) Total output divided by the total population.

B) The growth rate of aggregate employment.

C) Output per employed worker.

D) The total number of workers in the labor force.

Correct Answer: C

The text directly defines this term: 'Output per employed worker is a measure of average labor productivity.'

If a country's real GDP per capita increases from $50,000 to $52,500 in one year, what is its economic growth rate?

A) 2.5%

B) 4.8%

C) 5.0%

D) $2,500

Correct Answer: C

The economic growth rate is the percentage change in real GDP per capita. The calculation is (($52,500 - $50,000) / $50,000) * 100 = ($2,500 / $50,000) * 100 = 0.05 * 100 = 5.0%.

A significant improvement in a nation's education system that enhances workers' skills would promote long-run economic growth by increasing which of the following?

A) Human capital per worker.

B) Physical capital per worker.

C) Aggregate employment.

D) The price level.

Correct Answer: A

Improved education and skills directly increase the human capital per worker. According to the text, human capital per worker is a key determinant of productivity, which drives economic growth.

Holding other factors constant, what is the relationship between aggregate employment and aggregate output?

A) They are inversely related.

B) They are directly related.

C) There is no consistent relationship.

D) The relationship depends on the inflation rate.

Correct Answer: B

The provided content states, 'Aggregate employment and aggregate output are directly related because firms need to employ more workers in order to produce more output, holding other factors constant.'

A rightward shift of the long-run aggregate supply (LRAS) curve reflects long-run economic growth. This growth is primarily caused by an increase in which of the following?

A) Consumer confidence.

B) The money supply.

C) Government spending.

D) Productivity.

Correct Answer: D

A rightward shift of the LRAS curve represents an increase in the economy's potential output. This is driven by factors that increase productivity, such as improvements in technology, physical capital, and human capital, as outlined in the provided text.

The potential output of an economy, represented by the long-run aggregate supply (LRAS) curve, corresponds to which feature of the Production Possibilities Curve (PPC)?

A) A point inside the curve.

B) A point on the curve.

C) A point outside the curve.

D) The area under the curve.

Correct Answer: B

The PPC illustrates the maximum possible combinations of two goods an economy can produce with its available resources and technology. This frontier (a point on the curve) represents the economy's potential output, which is what the LRAS curve represents in the AD-AS model.

A government policy providing investment tax credits for firms that purchase new machinery would most directly impact economic growth by increasing which determinant of productivity?

A) Technology.

B) Human capital per worker.

C) Physical capital per worker.

D) Aggregate employment.

Correct Answer: C

New machinery is a form of physical capital. An investment tax credit encourages firms to buy more machinery, thus increasing the amount of physical capital per worker, which boosts productivity and economic growth.

According to the aggregate production function, an increase in physical capital per capita, with no change in human capital per capita, will lead to which of the following?

A) A decrease in output per capita.

B) No change in output per capita.

C) An increase in output per capita.

D) An unpredictable change in output per capita.

Correct Answer: C

The text states that the aggregate production function shows a positive relationship between output per capita and both physical and human capital per capita. Therefore, increasing one of these inputs (physical capital) while holding the other constant will increase output per capita.

Which of the following events would be illustrated by a rightward shift of both the long-run aggregate supply (LRAS) curve and the Production Possibilities Curve (PPC)?

A) An increase in government spending on infrastructure.

B) A decrease in corporate income taxes.

C) A widespread technological innovation.

D) An increase in the overall price level.

Correct Answer: C

A rightward shift of both the LRAS and PPC represents an increase in the economy's potential to produce. Of the options, a widespread technological innovation is a key determinant of productivity that directly increases this potential, causing both curves to shift right.

If a nation's real GDP grows by 5% in a year, while its population grows by 2%, the approximate growth rate of its real GDP per capita is:

A) 2.5%

B) 3%

C) 5%

D) 7%

Correct Answer: B

The growth rate of real GDP per capita is approximately the growth rate of real GDP minus the growth rate of the population. In this case, 5% - 2% = 3%.

The concept that firms need to employ more workers to produce more output is captured by which economic model mentioned in the text?

A) The Production Possibilities Curve (PPC).

B) The long-run aggregate supply (LRAS) curve.

C) The aggregate production function.

D) The measure of real GDP per capita.

Correct Answer: C

The text explicitly states that the direct relationship between aggregate employment and aggregate output 'is captured by the aggregate production function.'