2023, Set 1, Question 3 · Short · 5 points
2023 AP Macroeconomics FRQ 3 (Set 1) answers
Unemployment math and the PPC in Zeta
Work out how many people are unemployed from population and rate data, decide what kind of output gap exists, place the economy on a production possibilities curve, and say how discouraged workers change the labor statistics.
Skip to the worked answer and scoring (try the question first if you can)
Lessons this question draws on
1 Read the question
The question is College Board's, from the 2023, Set 1 exam. It starts on page 5 of the PDF.
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 6) What the exam readers saw (Chief Reader report)
4 Worked answer and scoring
Here is how a response that earns every point could read, part by part, and what each of College Board's scoring points asks for, put in our own words. Open a part once you have written your own answer to it. The scoring guidelines PDF above is the official word on every point.
Part a 1 point
Model answer
The labor force is 70% of the 1,000,000 adults: 700,000. Unemployed = 9% of the labor force = 0.09 × 700,000 = 63,000.
What earns the point
- 63,000, with the work shown. The unemployment rate is a share of the labor force, not of the whole adult population, so find the labor force first.
Part b 1 point
Model answer
A recessionary gap. Unemployment is 9%, above the natural rate of 5%, so the economy is producing less than it could at full employment.
What earns the point
- Recessionary, because 9% unemployment is above the 5% natural rate. Unemployment above its natural rate means cyclical unemployment, which goes with output below full employment.
Part c 1 point
Model answer
Draw a production possibilities curve bowed out from the origin, with consumer goods on one axis and capital goods on the other. Zeta has unemployed resources, so it is producing less than it could: point A goes inside the curve.
What earns the point
- A correctly labeled PPC with A inside it. Unemployment above the natural rate means some resources sit idle, so the economy is not on its frontier.
Part d 2 points
Model answer
(i) The labor force participation rate decreases. People who stop looking for work are no longer counted as unemployed, so they leave the labor force, and the labor force is a smaller share of the adult population.
(ii) The unemployment rate decreases, because the number of unemployed falls by more, in proportion, than the labor force does.
What earns each point
- The participation rate decreases, because the people who stopped looking are no longer counted in the labor force. To be in the labor force you have to be working or looking for work. These people are neither now.
- The unemployment rate decreases. The same number leaves both the unemployed count and the labor force, and since the unemployed are the smaller number, their share falls.
Common mistakes
The Chief Reader report for 2023 lists no common mistakes for this question.
Question, scoring guidelines and Chief Reader report: College Board. The title, summary and worked answer are ours.