How to Answer AP® Macroeconomics Free Response Questions (FRQs)

If you are struggling with the AP® Macroeconomics free-response questions (FRQs), you’ve come to the right place. This guide will explore proven techniques to approach the FRQs effectively and maximize your score.
Abstract illustration representing societal elements and macroeconomic concepts

Format of AP Macroeconomics FRQ Section

The AP Macroeconomics exam consists of two sections. The first section comprises 60 MCQs, and the second is the FRQs, composed of one long question and two short questions. 

The following is the structure of the AP Macro FRQ exam:

  • 3 Questions
  • Duration: 1 Hour (includes a 10-minute reading period)
  • Contributes to 33% of the Exam Score

In this section, a single extended FRQ constitutes 50% of the section score, accompanied by two shorter FRQs, each contributing 25%. Students are required to articulate assertions on economic concepts, principles, models, outcomes, and effects, providing detailed explanations. Furthermore, they must demonstrate analytical skills by interpreting numerical data and creating graphs or visual representations. This multifaceted assessment evaluates students' proficiency in both economic theory and analysis.

For more information on the exam format and structure, please read our article on the AP Macroeconomics Exam Format.

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Visual explanation of budget deficit and budget surplus

How to Answer AP Macroeconomics Free-Response Questions?

Navigating AP Macroeconomics FRQs requires strategic thinking and a structured approach. It's a smart move to use a reliable resource like UWorld’s AP Macroeconomics study guide to thoroughly understand key concepts, helping you frame your answers effectively.

Here are key strategies to help you excel in addressing these questions:

  1. Utilize the 10-Minute Planning Period

    • Take advantage of the time allocated for planning to analyze the question and organize your thoughts. 
    • Allocate approximately 25 minutes to the long question and divide the remaining 25 minutes between the other two short questions.

  2. Flexibility in Question Order

    • Answer questions in any order, starting with the one you feel most confident about.
    • Clearly indicate in your answer booklet which question you are addressing.

  3. Avoid Restating Questions

    • Be concise; exam readers are familiar with the questions, so get straight to the point and skip unnecessary restatements.

  4. Correct Terminology Usage

    • Use precise macroeconomic terminology to convey your understanding accurately.
    • Differentiate terms like money and income, and be mindful of correct labeling.

  5. Strategic Use of Graphs

    • Draw graphs to enhance your response when possible.
    • Clearly label graphs, explain their significance, and ensure correct representation.

  6. Consistent Outline and Order

    • Number or letter each part of your response to correspond with the question's outline, maintaining the order presented.

  7. Address All Parts of a Question

    • Attempt all parts of a question, as credit for each part is awarded independently.
    • Even if an earlier part is incorrect, you can still earn credit for subsequent parts.

  8. Provide Thorough Reasoning for "Explain" Prompts

    • When asked to "Explain," offer in-depth reasoning rather than a simple statement as a response.
    • Support assertions with evidence or rationale to strengthen your answer.

  9. Show Work in Calculations

    • When prompted to "Calculate," include your work; providing the final solution alone may not be satisfactory to get full points.
    • Showing work is essential for receiving credit in calculation questions.

  10. AP Macroeconomics FRQ Task Verbs

    • Summarize: Provide information about a specified topic without elaboration.
    • Analyze: Provide information on how or why a relationship occurs. Graphs are acceptable.
    • Calculate: Perform mathematical steps to arrive at a final answer, with the required showing of work.
    • Illustrate: Create a graph or visual representation that illustrates or explains relationships, with labels required.
    • Present: Display, label, plot, or indicate an economic scenario on the student's graph or visual representation. Clear labeling is essential.

  11. Bring a Four-Function Calculator

    • A four-function calculator is allowed and recommended for both exam sections.

AP Macroeconomics FRQ Examples

  1. Assume the economy of Vanderlandia is in short-run equilibrium with a real GDP of $500 million. The full employment level of real GDP is $550 million.
    1. Draw a correctly labeled graph of the aggregate demand, short-run aggregate supply, and long-run aggregate supply curves, and show each of the following.
      1. The current equilibrium real output and price level, labeled Y1 and PL1, respectively
      2. The full-employment output, labeled YF
    2. Assume no policy action is taken to restore full employment.
      1. Explain how the economy will adjust in the long run.
      2. Following the long-run adjustment process, will the price level in Vanderlandia be greater than, less than, or equal to PL1 shown on your graph in part (a)?
    3. Assume instead that policymakers in Vanderlandia are considering changing government spending to restore full employment in the short run and that the marginal propensity to save is 0.2.
      1. Calculate the minimum change and state the direction of change in government spending required to completely close the output gap in the short run. Show your work.
      2. On your graph in part (a), show the short-run effect of the change in government spending in part (c)(i), labeling the new equilibrium price level PL2.
    4. Draw a correctly labeled graph of the loanable funds market, and show the effect of the change in government spending in part (c)(i) on the equilibrium real interest rate.
    5. Based on the change in the real interest rate shown on your graph in part (d), what will happen to each of the following?
      1. The price of previously issued bonds
      2. The rate of economic growth in the long run. Explain.

How to approach:

Question 1: Long 10 points
  1. Draw a correctly labeled aggregate demand–aggregate supply graph that shows PL1 and Y1 at the intersection of aggregate demand and short-run aggregate supply.
 1 point

Demand–aggregate supply graph that shows PL1 and Y1 at the intersection

For the second point, the graph must show a vertical long-run aggregate supply curve to the right of Y1 and label the full-employment output as YF.

1 point

Vertical long-run aggregate supply curve

Total for part (a) 2 points
b
  1. Explain that input prices (e.g., nominal wages) and/or inflationary expectations will decrease, causing SRAS to increase until it reaches full employment.
 		1 point
 
  1. State that the price level will be less than PL1.
 		1 point
Total for part (b)  2 points
c  
  1. Calculate the minimum change in government spending as an increase of $10 million and show your work.
1 point
Minimum Change = Output Gap / Spending Multiplier = $50 million / ( 1 / 0.2 ) = $50 million / 5  
 
  1. On the graph from part (a), show the short-run effect of the change in government spending as a rightward shift of the aggregate demand curve where the new short-run equilibrium intersects the long-run aggregate supply curve at a higher equilibrium price level, labeled PL2.
 		1 point

Long-run aggregate supply curve, labeled PL2.

Total for part (c)  2 points
d.  
  1. Draw a correctly labeled graph of the loanable funds market.
 		1 point

A graph marked with quantity of loanable funds and real interest rate on the XY coordinates

For the second point, the graph must show an increase in the demand for loanable funds (or a decrease in the supply of loanable funds), resulting in an increase in the equilibrium real interest rate.

 1 point

Quantity of loanable funds and real interest rate on the XY axis

Total for part (d)  2 points
e  
  1. State that the price of previously issued bonds will decrease.
 		1 point
  1. State that the rate of economic growth in the long run will decrease and explain that an increase in the real interest rate means the cost of borrowing has increased, which will decrease investment spending on physical capital, human capital, and/or research and development.
 1 point
Total for part (e)  2 points
Total for question 1   10 points

(Source: (2023). AP Macroeconomics Free-Response Questions Set 1. AP College Board. Retrieved December 23, 2024, from https://apcentral.collegeboard.org/media/pdf/ap23-frq-macroeconomics-set-1.pdf)

  1. The economy of Noralandia is in short-run equilibrium with an actual inflation rate that is currently higher than the expected inflation rate.
    1. Draw a correctly labeled graph of the short-run and long-run Phillips curves. Label the current short-run equilibrium point as X.
    2. The banking system in Noralandia has ample reserves. Identify a specific monetary policy action that the central bank of Noralandia would take to bring the inflation rate closer to the expected inflation rate.
    3. Noralandia has an open economy and a flexible exchange rate. Based solely on the effect of the monetary policy action identified in part b. on interest rates in Noralandia, will there be an increase, a decrease, or no change in the flow of international financial capital into Noralandia? Explain.
    4. Based on your answer to part c., what will happen to the international value of Noralandia’s currency? Explain.

How to approach:

Question 2: Short 5 points
a.  
  1. Draw a correctly labeled graph of the short-run Phillips curve (SRPC).
 1 point

Employment rate, inflation rate on the XY axis

For the second point, the graph must include a correctly labeled long-run Phillips curve (LRPC) and show point X on the SRPC to the left of the LRPC.

1 point

Unemployment rate, inflation rate on the XY axis

Total for part (a)  2 points
b.  
  1. State that the central bank would increase its administered interest rates or increase interest on reserves.
1 point
c.  
  1. State that there will be an increase in the flow of international financial capital into Noralandia and explain that international investors will seek higher returns on financial capital in Noralandia.
1 point
d.  
  1. State that Noralandia’s currency will appreciate and explain there will be an increase in the demand for Noralandia’s currency (or a decrease in the supply of Noralandia’s currency).
1 point
Total for question 2  5 points

(Source: (2023). AP Macroeconomics Free-Response Questions Set 1. AP College Board. Retrieved December 23, 2024, from
https://apcentral.collegeboard.org/media/pdf/ap23-frq-macroeconomics-set-1.pdf)

  1. Assume that in the country of Zeta, the civilian noninstitutional population aged 16 and over is 1,000,000. The labor force participation is 70%, the unemployment rate is 9%, and the natural rate of unemployment is 5%.
    1. Calculate the number of people in Zeta that are unemployed. Show your work.
    2. Is the economy of Zeta currently experiencing a recessionary gap, an inflationary gap, or no output gap? Explain.
    3. Consumer goods and capital goods are produced in the country of Zeta. Draw a correctly labeled graph of the production possibilities curve for Zeta. Indicate a point, labeled A, that represents the current state of Zeta’s economy.
    4. If some individuals who are counted as unemployed in Zeta stop looking for work, what will happen to each of the following?
      1. The labor force participation rate. Explain.
      2. The unemployment rate

How to approach:

Question 3: Short 5 points
a.  

  1. Calculate the number of people that are unemployed as 63,000 and show your work.

    Unemployed   =  Unemployment Rate × Labor Force Participation Rate × Adult Population
      =  9%× 70%× 1,000,000 = 63,000

 1 point
b.  
  1. State that the country of Zeta is currently experiencing a recessionary gap and explain that the current unemployment rate (9%) is higher than the natural rate of unemployment (5%).
1 point
c.  
  1. Draw a correctly labeled graph of the production possibilities curve (PPC) for Zeta that shows point A below the PPC.
1 point

Labeled graph of the production possibilities

d.  
  1. State that the labor force participation rate will decrease and explain that the labor force will decrease because the workers who stopped looking for employment are no longer considered to be unemployed.
1 point
 
  1. State that the unemployment rate will decrease.
1 point
Total for question 3  5 points

(Source: (2023). AP Macroeconomics Free-Response Questions Set 1. AP College Board. Retrieved December 23, 2024, from
https://apcentral.collegeboard.org/media/pdf/ap23-frq-macroeconomics-set-1.pdf

How can I practice Free Response Questions?

Mastering the AP Macro FRQs requires a thoughtful and effective strategy. Here are tailored study tips to enhance your performance in this section:

  • Begin by understanding the structure of the FRQ section. Take note of the number of questions, time constraints, and point allocations for effective time management.
  • Ensure a robust understanding of fundamental macroeconomic concepts. Identify the weight of each unit in the AP Macro FRQ section, focusing more on more significant topics.
  • Engage in extensive question practice by using UWorld’s AP Macro QBank. Pay close attention to incorrect responses. Understand the reasons behind mistakes, address uncertainties, and refine your understanding of critical concepts.
  • Develop a comprehensive study plan tailored for FRQs. Utilize our AP Macroeconomics study plan to set realistic goals for each study session, ensuring systematic coverage of all units before the exam.

Looking to score high on the AP Macroeconomics exam and get into your dream college? Prepare with UWorld’s AP Macro prep course to master key topics and ace the test.

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Visual illustration of the consumer price index for a market basket of goods over time.

Frequently Asked Questions (FAQs)

In the AP Macroeconomics free-response section, you have the potential to earn a total of 20 points. Your responses are evaluated based on a detailed rubric that underscores a robust grasp of macroeconomic principles and concepts, precise application of economic principles to address specific scenarios, thorough analysis and evaluation of economic relationships, and effective use of graphs or diagrams when applicable. Earning credit is contingent upon clear and concise expression, coupled with addressing all components of the question.
The FRQ section of the AP Macroeconomics exam lasts for one hour, constituting 33% of the overall exam score. The section includes three questions, with a 10-minute reading period. It comprises one long free-response question contributing 50% to the section score and two short free-response questions, each accounting for 25% of the section score.
Yes, including correctly labeled diagrams is encouraged, if applicable or required, in explaining your answers to FRQs.
Yes, discussing current economic events can significantly enhance your FRQ responses. Connecting theoretical concepts to real-world examples demonstrates a practical understanding of macroeconomic principles and provides relevant context to your answers. For instance, when describing recent economic occurrences, you can use the AD-AS (Aggregate Demand-Aggregate Supply) model to illustrate national income determination and fluctuations in the price level. Connecting the AD-AS model to real-world examples demonstrates a practical understanding of macroeconomic principles, providing a well-rounded and comprehensive response to FRQs.
Utilize the College Board® past exam questions to practice and evaluate previous years’ FRQs.

References

  1. (2024). AP Macroeconomics. AP Central. Retrieved December 11, 2024, from https://apcentral.collegeboard.org/courses/ap-macroeconomics/exam
  2. (2024). AP Macroeconomics Exam Tips. AP Central. Retrieved December 11, 2024, from https://apstudents.collegeboard.org/courses/ap-macroeconomics/exam-tips
  3. (2023). AP Macroeconomics Free-Response Questions Set 1. AP College Board. Retrieved December 11, 2024, from https://apcentral.collegeboard.org/media/pdf/ap23-frq-macroeconomics-set-1.pdf
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