AP Macroeconomics · Past multiple choice · Question 4, older AP Economics course description · Four-function calculator
Borrowing to pay for more government purchases
A government runs a bigger deficit and so demands more loanable funds. Predict the long-run effect on the real interest rate and on investment.
Lessons this question tests
1 Read the question
The question is College Board's: sample question 4 in AP Economics Course Description. It starts on page 33 of the PDF. College Board no longer posts this edition, so it opens from the copy the Internet Archive saved on June 3, 2016. A four-function calculator is allowed, as on the exam.
Open Question 4 (PDF, page 33)
2 Pick your answer
Question and answer key: College Board, from the Internet Archive. The title and summary are ours.