2022, Set 2, Question 1 · Long · 10 points
Inflationary gap, spending boost and the dollar
Graph an economy above potential, add a government spending increase, and use the multiplier for the largest change in output. Then show the money market and bond price effects, how higher US inflation moves demand for dollars, and which currencies the Fed would trade to hold the dollar steady.
This exam had three free-response questions in a 60 minute section (a 10 minute reading period and 50 minutes of writing), worth 10, 5 and 5 points, with students told to spend about half the time on Question 1 and split the rest between Questions 2 and 3. College Board's scoring guidelines label Question 1 Long and Questions 2 and 3 Short. 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 2022, Set 2 exam. It starts on page 3 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 February 22, 2026.
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) What the exam readers saw (Chief Reader report)
Question, scoring guidelines and Chief Reader report: College Board, from the Internet Archive. The title, summary are ours.