2004, Form B, Question 1 · 12 points
Oil price shock and two policy responses
Show how a rise in oil prices affects output and the price level on an AD-AS graph and shifts the short-run Phillips curve, explain how a money supply increase would work through to aggregate demand, then graph the effect of a business tax cut that lowers production costs.
This exam had three free-response questions to answer in 50 minutes of writing time after a 10-minute planning period, with about half the time suggested for Question 1 and the rest split evenly between Questions 2 and 3. The current exam has 3 free-response questions in 60 minutes. The skills these questions practice still count.
1 Read the question
The question is College Board's, from the 2004, Form B exam. It starts on page 2 of the PDF. College Board no longer posts this exam, so it opens from the copy of College Board's PDF that the Internet Archive saved on September 25, 2023.
2 Write your answer
Answer each part the way you would on the exam, in full sentences, with your work shown. Your writing saves as you type.
3 Score it
Score your answer against College Board's scoring guidelines, one point at a time. Give yourself a point only when your answer says what the guideline asks for.
Scoring guidelines (PDF, page 2)
Question, scoring guidelines and Chief Reader report: College Board, from the Internet Archive. The title, summary are ours.