This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Macroeconomics – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 1 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Government advisors have suggested the following policies to reduce youth unemployment. Which policy would not increase public expenditure? A) Cutting the minimum wage paid to young people. B) Raising the school-leaving age. C) Giving a subsidy to employers to recruit young people. D) Introducing a national military service for all. Show Answer Correct Answer: A) Cutting the minimum wage paid to young people. 2. The three endogenous variables found in the IS equation and the LM equation are? A) Y, P, and r. B) C, T, and I. C) L, r, and Y. D) C, I, and G. Show Answer Correct Answer: A) Y, P, and r. 3. The crowding out effect can only occur if the A) Government deficit spends. B) Government runs a surplus. C) Personal savings rate increases. D) Economy begins to boom. Show Answer Correct Answer: A) Government deficit spends. 4. TRUE or FALSE:Defensive expenditures are expenditures made to maintain the status quo. A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 5. ??? expenditure:Expenditure on goods and services, wages, welfare payments and raw materials consumed within the current year. Short-term spending that has to be renewed each year A) Capital. B) Current. C) Short-run. D) Long-run. Show Answer Correct Answer: B) Current. 6. Business Investment is a measurement tool of GDP? A) True. B) False. Show Answer Correct Answer: A) True. 7. When imports exceed exports, there is a trade ..... A) Surplus. B) Deficit. C) Discrepancy. D) None of above. Show Answer Correct Answer: B) Deficit. 8. " To take an example, therefore, from a very trifling manufacture; but one in which the division of labor has been very often taken notice of, the trade of the ..... maker " A) Shoe. B) Bread. C) Pencil. D) Book. Show Answer Correct Answer: A) Shoe. 9. A worker at taco bell gets Cost of Living Adjustments every month. A) Helped by inflation. B) Hurt by inflation. Show Answer Correct Answer: A) Helped by inflation. 10. Which of the following would cause the aggregate supply curve to shift to the right? A) Increase in consumer optimism. B) Decrease in the cost of an important input. C) Increase in the amounts of imports. D) Increase in transfer payments. Show Answer Correct Answer: B) Decrease in the cost of an important input. 11. ..... the comparison among producers of a good according to their productivity A) Absolute Advantage. B) Comparative Advantage. C) Opportunity Cost. D) None of above. Show Answer Correct Answer: A) Absolute Advantage. 12. Increasing the money supply too much will cause ..... A) Massive inflation. B) Massive deflation. C) Increased interest rates. D) Decreased interest rates. Show Answer Correct Answer: A) Massive inflation. 13. Gross Domestic Products (GDP) measures A) The market value of intermediate products produced during the year. B) The sum of the market value of both final and intermediate products produced during the year. C) The sum of the market value of final products produced and imported during the year. D) The market value of final products produced in the nation during the year. Show Answer Correct Answer: D) The market value of final products produced in the nation during the year. 14. Which group within the Federal Reserve system decides whether to raise or lower interest rates and is the Fed's primary monetary policymaking body? A) Board of Governors. B) Federal Open Market Committee. C) Federal Advisory Council. D) Federal Reserve Banks. Show Answer Correct Answer: B) Federal Open Market Committee. 15. Which of these best defines equilibrium in a market? A) A situation in which quantity supplied is greater than quantity demanded. B) A situation in which quantity demanded is greater than quantity supplied. C) A situation in which quantity supplied and quantity demanded are equal. D) A situation where a minimum price is set. Show Answer Correct Answer: C) A situation in which quantity supplied and quantity demanded are equal. 16. Assume that the opportunity cost of producing wheat is lower in Australia compared with Malaysia. Further assume that the opportunity cost of producing cars is higher in Australia compared with Malaysia. Which country has a comparative advantage in producing cars? A) Australia and Malaysia. B) Australia. C) Malaysia. D) Both countries have to specialise in producing wheat. Show Answer Correct Answer: C) Malaysia. 17. The " Tax Cuts and Jobs Act of 2017, " passed by Congress is an example of: A) Monetary Policy. B) Fiscal Policy. C) International Trade Policy. D) Regulatory Policy. Show Answer Correct Answer: B) Fiscal Policy. 18. Assume that the market for bottled water is in equilibrium. If both the supply of and the demand for bottled water decrease, what will be the effect on equilibrium price and quantity? A) Price-Decrease / Quantity-Decrease. B) Price-Decrease / Quantity-Increase. C) Price-Increase / Quantity-Decrease. D) Price-Increase / Quantity-Indeterminate. E) Price-Indeterminate / Quantity-Decrease. Show Answer Correct Answer: E) Price-Indeterminate / Quantity-Decrease. 19. Tax incentives to increase private savingaffect on steady state level and steady state growth of total output per person A) Increases s.s level, s.s growth rate unchanged. B) Decreases s.s level, s.s growth rate unchanged. C) Increases s.s level, s.s growth rate increases. D) Increases s.s level, s.s growth rate decreases. Show Answer Correct Answer: A) Increases s.s level, s.s growth rate unchanged. 20. Golden rule with population growth A) C*=f(k*)-( $\delta$ $\delta$. B) False. Show Answer Correct Answer: A) C*=f(k*)-( $\delta$ $\delta$. Next →Related QuizzesEconomics QuizzesMacroeconomics Quiz 2Macroeconomics Quiz 3Macroeconomics Quiz 4Macroeconomics Quiz 5Macroeconomics Quiz 6Macroeconomics Quiz 7Macroeconomics Quiz 8Macroeconomics Quiz 9Macroeconomics Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books