Practice a College Board-style free response question on Economic Indicators & the Business Cycle. Write your response, then reveal the model answer to see exactly what earns each point.
The economy of Brenholm reports the following data for two consecutive years:
Year
Nominal GDP
GDP Deflator (base year = 100)
Year 1
$400 billion
100
Year 2
$450 billion
112.5
In Year 2, Brenholm's labor force is 50 million people, of whom 47.5 million are employed.
A
Calculate Brenholm's real GDP in Year 2. Show your work.
✓ Model answer (earns the point)
Real GDP = (Nominal GDP ÷ GDP deflator) × 100 = ($450 billion ÷ 112.5) × 100 = $400 billion.
Why it scores: Uses the correct formula, shows the division and multiplication steps, and arrives at the correct numeric answer with units ($400 billion). A bare number with no units or formula shown would earn less credit.
B
Using your answer from Part A, explain whether Brenholm's economy actually produced more output in Year 2 than in Year 1.
✓ Model answer (earns the point)
No, Brenholm's economy did not produce more real output in Year 2. Real GDP in Year 2 ($400 billion) is exactly equal to Year 1's GDP ($400 billion, which is both the nominal and real value since Year 1 is the base year). The entire $50 billion increase in nominal GDP was caused by rising prices (the deflator rose from 100 to 112.5), not by any actual increase in the quantity of goods and services produced.
Why it scores: Correctly concludes that real output did not increase, and explains why — attributing the nominal increase entirely to inflation rather than real growth. A response that says "yes, GDP grew because nominal GDP rose" would not earn the point, since it ignores the real/nominal distinction.
C
Calculate Brenholm's unemployment rate in Year 2. Show your work.
✓ Model answer (earns the point)
Number unemployed = Labor force − Employed = 50 million − 47.5 million = 2.5 million. Unemployment rate = (Unemployed ÷ Labor force) × 100 = (2.5 million ÷ 50 million) × 100 = 5%.
Why it scores: Correctly finds the number unemployed first, then applies the unemployment rate formula, and labels the final answer as a percentage. Skipping the intermediate step of finding the number unemployed is a common source of errors on this type of question.
How to score points on AP Macroeconomics FRQs
Show every step of a calculation. A correct final number with no visible formula or work often earns less credit than a clearly labeled calculation.
Always distinguish real from nominal when asked to interpret a change in GDP. A rising nominal value does not automatically mean rising real output — graders specifically look for this distinction.
Label your units and round appropriately. "5" is not the same as "5%" to an AP grader.
Answer the verb in the prompt. "Calculate" needs a number. "Explain" needs a number PLUS the reasoning connecting it to the question.
Watch for multi-part calculations that build on each other. If Part B references Part A, make sure your answer is internally consistent with what you calculated earlier.