---
title: "AP Macroeconomics Unit 6 Practice Test"
description: "A timed AP Macroeconomics Unit 6 (Open Economy – International Trade and Finance) practice test in the AP format, drawn from 960 multiple-choice questions and 42 FRQs written for the unit. The standard version takes about 63 minutes."
canonical: "https://fiveable.me/ap-macro/unit-test/6"
type: "unit-test"
subject: "AP Macroeconomics"
unit: "Unit 6"
---

# AP Macroeconomics Unit 6 Practice Test

## Overview

A timed AP Macroeconomics Unit 6 (Open Economy – International Trade and Finance) practice test in the AP format, drawn from 960 multiple-choice questions and 42 FRQs written for the unit. The standard version takes about 63 minutes.

## Test Format

- 20 Multiple Choice Questions (23 minutes)
- 1 FRQ – FRQ 1 – Long (20 minutes)
- 1 FRQ – FRQ 2 – Short (20 minutes)

## Unit FRQs by Type

- [FRQ 1 – Long](/ap-macro/frqs/long-frq?unit=6): 4 questions
- [FRQ 2 – Short](/ap-macro/frqs/short-frq-2?unit=6): 20 questions
- [FRQ 3 – Short](/ap-macro/frqs/short-frq-3?unit=6): 18 questions

## Practice Questions

### Question 1

A country pegs its currency at $$2$$ units per dollar. At this rate, the quantity of dollars supplied is 10 million and the quantity demanded is 25 million. What does this data indicate?

- (A) A shortage of 15 million dollars
- (B) A surplus of 15 million dollars
- (C) A shortage of 35 million dollars
- (D) A surplus of 35 million dollars
- (E) An equilibrium of 17.5 million dollars

**Answer: (A)** Comparing quantity demanded ($$25$$ million) to quantity supplied ($$10$$ million) reveals that demand exceeds supply by $$15$$ million, creating a shortage of dollars in the foreign exchange market.

### Question 2

At an exchange rate of $$100$$ yen per dollar, the quantity of dollars demanded is $$50$$ billion and quantity supplied is $$80$$ billion. What is the situation in the market for dollars?

- (A) A shortage of 30 billion dollars
- (B) A surplus of 30 billion dollars
- (C) A shortage of 50 billion dollars
- (D) A surplus of 80 billion dollars
- (E) An equilibrium of 65 billion dollars

**Answer: (B)** Quantity supplied ($$80$$) exceeds quantity demanded ($$50$$) by $$30$$ billion, creating a surplus of dollars.

### Question 3

A country maintains a fixed exchange rate that is currently below the equilibrium market rate. If foreign demand for the country's exports significantly increases, what will happen to the currency market disequilibrium?

- (A) The shortage of the currency will increase as quantity demanded rises
- (B) The shortage of the currency will decrease as quantity supplied rises
- (C) The surplus of the currency will increase as quantity supplied rises
- (D) The surplus of the currency will decrease as quantity demanded rises
- (E) The surplus of the currency will increase as quantity demanded rises

**Answer: (A)** Linking export demand to currency demand shows that foreign buyers need more of the currency to buy exports, shifting demand right and widening the shortage caused by the undervalued peg.

### Question 4

The country's currency appreciates significantly against its major trading partners. How will this change affect the net exports component of GDP?

- (A) Exports will decrease and imports will increase, reducing net exports
- (B) Exports will increase and imports will decrease, raising net exports
- (C) Exports and imports will both increase, leaving net exports unchanged
- (D) Exports and imports will both decrease, leaving net exports unchanged

**Answer: (A)** Applying exchange rate logic shows that appreciation makes domestic goods expensive abroad (lowering exports) and foreign goods cheap domestically (raising imports), causing net exports to fall.

### Question 5

Country X experiences an inflation rate of 8% while its trading partners experience an inflation rate of 2%. Assuming fixed exchange rates, how will this differential affect demand for Country X's exports?

- (A) Demand decreases as Country X's goods become relatively more expensive
- (B) Demand increases because fixed exchange rates prevent Country X's currency from appreciating
- (C) Demand remains unchanged as fixed exchange rates insulate Country X's exports from inflation effects
- (D) Demand decreases as Country X's higher inflation reduces its money supply and increases real interest rates

**Answer: (A)** Higher inflation in Country X means its domestic prices rise faster than those abroad. With fixed exchange rates, foreign buyers find Country X's goods more expensive relative to their own, reducing export demand.

### Question 6

Country A experiences an unexpected surge in inflation relative to its trading partners. How will this most likely affect the demand for Country A's exports?

- (A) Demand will decrease because Country A's goods become relatively more expensive
- (B) Demand will remain unchanged because inflation affects all trading partners equally
- (C) Demand will increase because higher inflation signals economic growth in Country A
- (D) Demand will decrease because Country A's trading partners will retaliate with tariffs

**Answer: (A)** Linking domestic inflation to international trade requires analyzing relative prices. When Country A's price level rises faster than its partners', its goods become more expensive for foreign buyers, leading to a decrease in the quantity demanded of exports.

### Question 7

A country's major trading partners experience a severe recession while the country's domestic currency simultaneously depreciates. Which of the following describes the combined effect on the country's net exports?

- (A) The change in net exports is indeterminate because the factors exert opposing influences on demand
- (B) Net exports will definitely increase because depreciation makes domestic goods cheaper abroad
- (C) Net exports will definitely decrease because the recession reduces foreign income and spending
- (D) Net exports will remain unchanged because exchange rates adjust to offset foreign income changes

**Answer: (A)** Evaluating the forces shows that the partner recession reduces demand for exports (lowering NX), while currency depreciation makes exports cheaper (raising NX), leading to an ambiguous net outcome.

### Question 8

The domestic price level rises significantly while the currency of a major trading partner simultaneously depreciates against the domestic currency. What is the combined effect on net exports?

- (A) Net exports will decrease because domestic goods become relatively more expensive via both channels
- (B) Net exports will increase because the trading partner's currency depreciation boosts their purchasing power
- (C) The change in net exports is indeterminate because the price level and exchange rate have opposing effects
- (D) Net exports will remain unchanged because purchasing power parity restores equilibrium immediately

**Answer: (A)** Synthesizing the price and exchange rate effects shows that domestic inflation makes exports expensive, and the partner's depreciation makes them even more expensive for foreign buyers, reinforcing the decline.

### Question 9

An economy is in a trough. If the government increases spending and the currency depreciates simultaneously, how will these factors influence the recovery?

- (A) Both factors increase aggregate demand, accelerating the recovery
- (B) Both factors decrease aggregate demand, delaying the recovery
- (C) Government spending aids recovery, but currency depreciation hinders it
- (D) Currency depreciation aids recovery, but government spending hinders it
- (E) Government spending aids recovery, but currency depreciation reduces net exports

**Answer: (A)** Analyzing the components of aggregate demand reveals that increased government spending directly raises demand, while currency depreciation makes exports cheaper and imports more expensive, increasing net exports. Both factors reinforce each other to boost aggregate demand and speed up the recovery.

### Question 10

A country's currency depreciates significantly relative to its trading partners. What is the most likely effect on the aggregate demand curve?

- (A) Aggregate demand shifts right because net exports increase due to cheaper exports
- (B) Aggregate demand shifts left because net exports increase due to cheaper exports
- (C) Aggregate demand shifts right because consumption increases due to cheaper imports
- (D) Aggregate demand shifts left because consumption increases due to cheaper imports
- (E) Aggregate demand shifts left because net exports decrease due to cheaper exports

**Answer: (A)** Analyzing exchange rates: depreciation makes domestic goods cheaper for foreigners (increasing exports) and foreign goods expensive for locals (decreasing imports), raising net exports and AD.

## Review the Unit

- [6.1 Balance of Payments Accounts](/ap-macro/unit-6/balance-payments-accounts/study-guide/MEkzfENIHzo5dnQvRLbo)
- [6.2 Exchange Rates](/ap-macro/unit-6/exchange-rates/study-guide/DrVdD6kc9sWBR4WI4G8J)
- [6.3 Foreign Exchange Market](/ap-macro/unit-6/foreign-exchange-market/study-guide/WTPlTJgd7wSsnRl17knO)
- [6.4 Effect of Changes in Policies & Economic Conditions on the Foreign Exchange Market](/ap-macro/unit-6/policies-economic-conditions-foreign-exchange-market/study-guide/sfILXjvT4oI0aHiQCKwd)
- [6.5 Changes in the Foreign Exchange Market and Net Exports](/ap-macro/unit-6/changes-foreign-exchange-market-net-exports/study-guide/EjosTfQsU92xgC0EZozJ)
- [6.6 Real Interest Rates and International Capital Flows](/ap-macro/unit-6/real-interest-rates-international-capital-flows/study-guide/1MFFdtszGyIVcA7p4JDT)

## Other Unit Tests

- [Unit 1: Basic Economic Concepts](/ap-macro/unit-test/1)
- [Unit 2: Economic Indicators and the Business Cycle](/ap-macro/unit-test/2)
- [Unit 3: National Income and Price Determination](/ap-macro/unit-test/3)
- [Unit 4: Financial Sector](/ap-macro/unit-test/4)
- [Unit 5: Long-Run Consequences of Stabilization Policies](/ap-macro/unit-test/5)

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