Question bank / Advanced Placement / AP Macroeconomics AP Macroeconomics: Unit 4: Financial Sector Original, AI-authored English practice with worked guidance. Selected topics only; independent teacher review is pending. This is not a complete syllabus, official past-paper collection or predicted exam score. SubjectScout is not affiliated with or endorsed by College Board. SAT practice is not a full adaptive test; AP practice does not simulate an entire exam.
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All topics Unit 1: Basic Economic Concepts (1) Unit 2: Economic Indicators and the Business Cycle (3) Unit 3: National Income and Price Determination (3) Unit 4: Financial Sector (4) Unit 5: Long-Run Consequences of Stabilization Policies (4) Unit 6: Open Economy - International Trade and Finance (3) Official AP framework reference (framework only, not a source of copied questions).
Topic All topics Unit 1: Basic Economic Concepts Unit 2: Economic Indicators and the Business Cycle Unit 3: National Income and Price Determination Unit 4: Financial Sector Unit 5: Long-Run Consequences of Stabilization Policies Unit 6: Open Economy - International Trade and Finance Practice view All questions Unanswered Bookmarked Review mistakes Difficulty All levels Foundation Standard Challenge Search questions
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Loading saved progress Question 5 · Unit 4: Financial Sector · foundation
A one-year loan has a 7% nominal interest rate and expected inflation of 3%. Using the AP introductory approximation, what is its expected real interest rate? A. 10%B. 3%C. 4%D. 7%Check answer Question 6 · Unit 4: Financial Sector · standard
A central bank operates an ample-reserves system in which interest on reserve balances is its main policy tool. Other administered rates move consistently with policy. To restrain aggregate demand, which action and transmission are most consistent with this model, other things equal? A. Raise interest on reserves, tending to raise short-term rates and reduce interest-sensitive spending.B. Lower interest on reserves, tending to raise borrowing costs.C. Raise interest on reserves, guaranteeing that every bank stops lending.D. Keep all rates unchanged, which necessarily eliminates inflation immediately.Check answer Question 13 · Unit 4: Financial Sector · standard
A default-free bond makes a single payment of $110 exactly one year from today and has no other payments. Its current price rises from $100 to $105. With maturity and payment fixed, what happens to the nominal one-year yield for a buyer paying the new price? A. It rises from 10% to approximately 14.29%.B. It stays at 10% because the payment is unchanged.C. It falls from 10% to 5%, exactly.D. It falls from 10% to approximately 4.76%.Check answer Question 14 · Unit 4: Financial Sector · challenge
In a simplified limited-reserves banking model, a central bank buys $1,000 of securities from a nonbank seller and credits the seller's checking account through its bank, adding $1,000 to bank reserves. Initially banks hold no excess reserves. The required reserve ratio is 20%; banks lend all available excess reserves, every loan is redeposited, and nobody holds extra currency. What are the maximum total increases in checking deposits and bank loans, including the initial transaction? A. Deposits $5,000; loans $4,000B. Deposits $4,000; loans $5,000C. Deposits $1,000; loans $800D. Deposits $5,000; loans $5,000Check answer All Advanced Placement subjects
