AP®︎ Macroeconomics: Topic 6.6 Practice Test
Prepare for your quiz, test, or the AP exam with focused practice questions on Topic 6.6 of AP Macroeconomics – Real Interest Rates and International Capital Flows.
Questions List
Topic 6.6
Question 1 Easy
This question tests the following: MKT-5.G
What is capital flow?
What You’re Being Tested On:
Explore the learning objectives taken directly from the College Board’s AP® Macroeconomics Curriculum. Ensure you’re prepared for the exact topics covered on the AP® exam, in-class tests, and quizzes, and gain confidence in your mastery of the material.
Topic 6.6: Real Interest Rates and International Capital Flows
Learning Objective: MKT-5.G
Explain (using graphs as appropriate) how differences in real interest rates across countries affect financial capital flows, foreign exchange markets, and loanable funds markets.
Essential Knowledge: MKT-5.G.1
In an open economy, differences in real interest rates across countries change the relative values of domestic and foreign assets. Financial capital will flow toward the country with the relatively higher interest rate. [See EK MKT-4.E.2 and EK MEA-4.A.6 for explanations of the impact on the loanable funds market and on net exports.]
Essential Knowledge: MKT-5.G.2
Central banks can influence the domestic interest rate in the short run, which in turn will affect net capital inflows.
