Arnold Kling  

AP econ quiz

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I got 18 out of 18, which is comforting, since I may be teaching AP econ next year. I don't much care for the AP econ curriculum, but I figure 2009-2010 I ought to be able to make something interesting out of an econ class.

Thanks to Greg Mankiw for the pointer.


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CATEGORIES: Economic Education



COMMENTS (22 to date)
Kit writes:

I got 17/18 (got the last one wrong). No bad for a blog trained amateur. :)

JamesFromPittsburgh writes:

14/18. I'll have to be more diligent reading this blog!

David writes:

I disagree with their answer to question 7. It seems to me that expansionary monetary and fiscal policy will lead to higher interest rates and have an undetermined impact on employment. You'd end up with higher interest rates because you would eventually have to fight inflation and the Philips Curve doesn't always apply in the short run and especially not in the long-run. If they added "short term" to qualify the "effect" I could go along with it.

AC writes:

I thought #7 was problematic for a different reason. I assumed they meant short-term, but I assumed that if the Fed was determined to use an expansionary policy, they would be successful in lowering (short-term) interest rates.

And on #6, doesn't (3) seem plausible as well? According to monetarists, expansionary fiscal policy should be used only when some resources are unemployed and the inflation rate is low. It doesn't say fiscal policy should necessarily be used under those conditions.

David R. Henderson writes:

I got 16 out of 18. :-(

(WARNING: THIS PARAGRAPH IS A SPOILER).I've forgotten the question but one of them had as the correct answer that an increase in labor productivity reduces unemployment. That's still not clear to me. It's true that that would happen with no change in wage rates, but what are we supposed to take as given? Is employment lower or higher in the steel industry than it was 50 years ago when productivity was less than 1/5 of its current level. And when they're unemployed, it takes time to find a job.

AC writes:

David, you have to think in terms of the AD/AS model, you're thinking too much!

Jacob Oost writes:

Yeah, that was an all-macro test with a slight neo-Keynesian bias, if you ask me. To answer "correctly" I sometimes had to give an answer I thought was wrong, but knew was "right" from the POV of the test-givers. 15/18

Would have been 16/18 but for a dumb error I made.

Felix writes:

How many of those predictive answers have facts behind them? That is, are there graphs of real data that show the truth of the predictive assertions?

Arare Litus writes:

16/18, picking a couple I didn't buy but thought were the answers sought - so could have been lower.

I also "stumbled" on the question David Henderson mentioned, and I also think that there is something deep behind there... [perhaps we should get Bryan to comment on this, his micro midterm question posting discusses this, use the search box, or links to the question & his answer here:
http://arare-litus.blogspot.com/2009/03/bryan-caplans-thought-experiment-what.html ].

Bill Hocter, MD writes:

18/18. Thanks! this was a lot of fun and reading this blog certainly helps. I've never had an econ course, though my father (requiscat in pacem)was chief economist at the Cleveland Fed in the 70's and taught a mean course at the dinner table:)

Libertarian writes:

17/18 - and I agree there was a slightly Keynesian bias. Sometimes they should have added "from a Keynesian perspective" or so.

Arnold (or David), please could you say some words about question 18 (the only one I got wrong).

AC writes:

On #18, with a 12% reserve requirement and $100,000 in deposits, it has to hold $12,000 in reserves. Since it has $15,000 it can lend out an additional $3000.

Martin writes:

17/18

I got the second question wrong. Looks like the AP board is intent on raising a bunch of Keynesian sycophants...

R. Pointer writes:

My high school Macro teacher used to help write the AP test. Thank goodness my college teachers didn't focus on this stuff too much. I find it the most boring part of Econ.

Still 18/18.

Snark writes:

18/18 (if you include the two bonus questions prior to taking the test).

Radford Neal writes:

On #18, with a 12% reserve requirement and $100,000 in deposits, it has to hold $12,000 in reserves. Since it has $15,000 it can lend out an additional $3000.

That's what I answered, since it seemed to be what they wanted, but it actually seems indeterminate, since we don't know whether the money loaned will be deposited in the same bank.

Zz's writes:

Is that a serious representation of the AP exam? It seems like it covered about two classes worth of material: AD/AS model and very basic monetarism.

Although I got the question right because I knew what they were fishing for, I also disagreed with the labor productivity question. If new machines came out that replaced 30% of manual labor, wouldn't unemployment jump in the short-term?

Greg Ransom writes:

Simply appalling stuff.

No wonder this nation can't get its macroeconomic house in order.

The closest equivalent to this text would be an AP biology test written by Lysenkoians.

Matthew Durand writes:

ZZ, from what you say about 'new machines' it seems you're thinking of capital productivity, which indeed we would anticipate to increase unemployment. However, they did specify labour productivity, so...

Matthew Durand writes:

For those of you who are wondering whether that quiz was representative of the actual test, the answer is, yes, but only for the macroeconomics exam. AP Econ has separate tests for micro and macro and everything on the quiz there was, as others have noted, pretty macro focused.

If you think the test seems biased, I have to say it may seem that way from the quiz, but if you get into all the material for the macro part, they do try to provide alternative perspectives. This is only to a very limited degree however; the division is Classical, Monetarist, and Keynesian (no Austrian POV, sorry). Because it's a standardized test made by ETS they have to at least attempt to play it even handed. I would point out though that the weaknesses of the AP macro test really only reflect the weaknesses of the standard introductory macroeconomics you would pick up in most first year university texts.

Greg Ransom writes:

"the weaknesses of the standard introductory macroeconomics you would pick up in most first year university texts."

Greg Mankiw's intro to Macro text is a gigantic intellectual embarrassment, e.g. is account of "classical economics" doesn't rise above historically false propaganda straight out John Maynard Keynes.

Isaac K. writes:

Wait. Question number 11:
An increase in Labor productivity leads to lower inflation and LOWER unemployment?

If labor productivity increases to where supply excedes aggregate demand, than unemployment will intially INCREASE as a result of higher productivity.
Granted, in the long run a reduction in the marginal cost of labor will decrease unemployment, but are we taking a systemic view or not? Car companies are getting squeezed as they increase efficiency while demand stays low, and contracts restrict layoffs.

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