Macro math practice
Every calculation the Macro exam asks for, with new numbers every time. Type the answer rather than picking from four options — producing a number is a different skill from eliminating three wrong ones, and only one of them is what the exam scores.
Spending and tax multipliers
The tax multiplier is negative and always smaller in magnitude, because the first round of a tax cut is partly saved. Applying the spending multiplier to a tax change is the classic lost point.
The MPC is 0.53. Government cuts taxes by $1760 million. Calculate the change in real GDP, in millions.
Every skill in this set
- Spending and tax multipliersNational Income & Price Determination
- spending = 1/MPS · tax = −MPC/MPS
- The tax multiplier is negative and always smaller in magnitude, because the first round of a tax cut is partly saved. Applying the spending multiplier to a tax change is the classic lost point.
- Money multiplierFinancial Sector
- money multiplier = 1 / reserve ratio
- The multiplier applies to EXCESS reserves, not to the whole deposit. Multiplying the deposit itself overstates money creation by the required-reserve share.
- Real GDP and the deflatorEconomic Indicators & Business Cycle
- real GDP = (nominal / price index) × 100
- Nominal GDP rises with prices as well as output, so only real GDP measures growth. The index is on a base of 100, which is why the ×100 belongs there.
- Unemployment and participation ratesEconomic Indicators & Business Cycle
- unemployment = unemployed / labor force × 100
- The denominator is the labor force, not the population. Discouraged workers leave the labor force entirely, which lowers the measured rate without anyone finding a job.
Common questions
What math is on the AP Macroeconomics exam?
4 distinct calculations: spending and tax multipliers, money multiplier, real gdp and the deflator, unemployment and participation rates. Each one appears on the exam's formula sheet or is assumed by it, so the work is applying the relationship rather than recalling it.
Do the problems repeat?
No. Every problem is generated with fresh numbers, so the same skill can be practiced indefinitely without memorizing an answer. That is the whole point — being able to run a procedure on numbers you have not seen is what the exam actually tests.
How precise does my answer need to be?
Answers are accepted within about 1–3% of the exact value, which allows for rounding at intermediate steps the way a calculator does. Units are optional — type the number and the unit if you like, or just the number.