What this practice covers
These questions are drawn from past AP Economics papers and filtered to economic indicators and the business cycle. You answer, you find out immediately whether you were right, and you get the reasoning for the correct option and for each distractor. Wrong answers go to a mistakes locker so you can come back to exactly those.
Practice is free. You need an account only so your progress and your mistakes are still there next time.
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What examiners see students get wrong here
These are the errors that cost marks on economic indicators and the business cycle, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
- Dividing by the working-age population instead of the labour force.
- Counting transfer payments in G, or share purchases in I.
- Including intermediate or second-hand goods in GDP.
- Confusing disinflation with deflation.
- Forgetting that only unexpected inflation redistributes between borrowers and lenders.
- Treating nominal GDP growth as real growth.
- Forgetting that the deflator is 100 in the base year.
- Assuming the CPI and the GDP deflator must move together, imports are in one and not the other.
Revise it first
If any of the above is unfamiliar, work through the notes before practising: Economic Indicators and the Business Cycle revision notes.