Test Prep For AP® Courses


Which of the following is an economic growth policy most appropriate for a high-income country?

  1. establishing the rule of law
  2. protecting property rights
  3. investing in new infrastructure projects
  4. investing in technological innovations
  5. increasing private savings rates

What is one reason why unemployment rates differ among high- vs. low- and middle-income countries?

  1. High-income countries spend less on unemployment insurance, increasing their unemployment rate.
  2. Low- and middle-income countries benefit from a large pool of unskilled labor, keeping unemployment low.
  3. Low-income countries have a lot of informal employment in farming and fishing, masking the true—higher—unemployment rate relative to high-income countries.
  4. High-income countries have banned unions in attempts to keep unemployment higher.
  5. High-income countries have workers who cannot afford to lose their job and thus unemployment is lower there, whereas joblessness is not a crucial issue in middle- and low-income countries.

Foreign corporations with U.S. dollar-denominated loans are most likely going to suffer from which of the following events?

  1. high inflation in the United States
  2. an appreciation of the dollar
  3. high interest rates in the foreign country
  4. regulation of U.S. banks
  5. an increase in the budget deficit in the foreign country