You take tests during the year like a normal class, and at the end of the course you take the AP test with multiple coice and possibly essays depending on the class. The test is graded on a 1-5 scale, and depending on how well you do you can get college credit.
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One reason it was developed was to give the Chinese the idea that the emperor was supreme and divine. The Egyptian Pharaoh had different gods and their own type of religion while the Chinese had the Buddha, but they both had their people work for the worship of their God/gods.
The answer is the last one. Hope this helps!