This Thursday, high school students across the country will be filling in tiny bubbles on the macroeconomics Advanced Placement test. But how do you grade a test on economics when the answers in real life are changing every day? Take this question:
To counteract a recession, the Federal Reserve should: (A) raise the reserve requirement and the discount rate (B) sell securities on the open market and raise the discount rate (C) sell securities on the open market and lower the discount rate (D) buy securities on the open market and raise the discount rate (E) buy securities on the open market and lower the discount rate
The College Board says answer (E) is correct, but what about (F) — bail out the banks that are too big to fail? And subsidize giant insurance companies while you're at it?
The committee that writes the AP exam can move glacially to make even the smallest changes in the test. We won't know for a long time how the last six months are going to rewrite Economics 101.
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