AP AP Economics & Government 2

Question 1

In AP U.S. Government, what is the purpose of the system of checks and balances?

Accepted Answer

To prevent any one branch of government from gaining too much power

Answer

Checks and balances give each branch of government powers to limit the others, preventing any single branch from becoming too powerful.

Question 2

What is fiscal policy?

Accepted Answer

Government use of taxation and spending to influence the economy

Answer

Fiscal policy refers to government decisions about taxation and public spending used to influence macroeconomic conditions.

Question 3

In AP Government, what does the term 'federalism' describe?

Accepted Answer

A division of power between national and state governments

Answer

Federalism divides governmental authority between a national (federal) government and state governments, each with defined powers.

Question 4

What is a market externality in economics?

Accepted Answer

A cost or benefit affecting parties not involved in a transaction

Answer

An externality is an unintended side effect of an economic activity that affects third parties not directly involved in the transaction.

Question 5

Which economic concept describes a situation where two nations can both benefit by each specializing in what they produce most efficiently?

Accepted Answer

Comparative advantage

Answer

Comparative advantage holds that nations benefit from trade by specializing in goods they can produce at the lowest opportunity cost.

AP - Advanced Placement Test Practice Test