This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Macroeconomics – Quiz 104 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 104 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is a stock variable? A) Interest on capital. B) Distance between Delhi and Manali. C) Expenditure of money. D) All of these. Show Answer Correct Answer: B) Distance between Delhi and Manali. 2. The Austrian economic school attributes the primary cause of the businesscycle to: A) Misguided government intervention. B) The creative destruction of technological progress. C) Sticky price and wage expectations that exaggerate trends. D) None of above. Show Answer Correct Answer: A) Misguided government intervention. 3. The current account of the balance of payments is in surplus. However, there are deficits on the balance of trade in goods and the balance of trade in services. It can be concluded that ..... A) The trade figures must be inaccurate. B) The primary income (income flows) balance must be positive. C) The combined primary and secondary income (income flows and transfers) balance must be positive. D) The value of services exported must exceed the value of goods imported. Show Answer Correct Answer: C) The combined primary and secondary income (income flows and transfers) balance must be positive. 4. The labor force participation rate equals A) The number in the labor force divided by the adult population. B) The unemployment rate divided by the labor force. C) The adult population multiplied by the unemployment rate. D) The labor force added to the adult populaiton. Show Answer Correct Answer: A) The number in the labor force divided by the adult population. 5. Money A) Represents near-money. B) Is backed by gold. C) Is widely accepted for the payment of debt. D) Consists of bill only, not coins. Show Answer Correct Answer: C) Is widely accepted for the payment of debt. 6. In the long run (classical LRAS-vertical line), what impact do changes in the price level have on the quantity of output in the economy? A) Significant increase. B) Significant decrease. C) No effect. D) It varies depending on the specific economy. Show Answer Correct Answer: C) No effect. 7. The concept of opportunity cost would no longer be relevant if A) All current incomes were invested in technological research. B) Resources were allocated effectively. C) Poverty in an economy no longer existed. D) The supply of all resources was unlimited. Show Answer Correct Answer: D) The supply of all resources was unlimited. 8. Frictional unemployment occurs when which of the following happens? A) A worker is replaced by robots on factory assembly lines. B) A worker voluntarily quits a job to search for a better one. C) A worker is laid off because of a downturn in economic activity. D) A worker undergoes on-the-job training. E) A worker switches from working full-time to part-time. Show Answer Correct Answer: B) A worker voluntarily quits a job to search for a better one. 9. Which of the following is an important cause of inflation in an economy A) Increases in productivity in the economy. B) The influence of positive externalities on the economy. C) Lack of property rights in the economy. D) Growth in the quantity of money in the economy. E) The influence of negative externalities on the economy. Show Answer Correct Answer: D) Growth in the quantity of money in the economy. 10. If the government adopts a contractionary fiscal policy, where it tries to reduce government debt, it might ..... A) Increase spending and taxation. B) Eliminate taxation and spending. C) Increase taxation and reduce spending. D) Increase spending and reduce taxation. Show Answer Correct Answer: C) Increase taxation and reduce spending. 11. Do you remember the accurate formula of Inflation Rate (%)? A) CPI Current Year-CPI Previous Year x 100% CPI Current Year. B) CPI Previous Year-CPI Current Year x 100% CPI Current Year. C) CPI Previous Year-CPI Current Year x 100% CPI Previous Year. D) CPI Current Year-CPI Previous Year x 100% CPI Previous Year. Show Answer Correct Answer: D) CPI Current Year-CPI Previous Year x 100% CPI Previous Year. 12. Which of the following is not included in M1? A) Currency. B) Demand deposits. C) Savings deposits. D) Travelers' checks. Show Answer Correct Answer: C) Savings deposits. 13. An inflation tax is the result of A) The federal government running a budget surplus. B) The Federal Reserve raising the federal funds rate. C) An increase in the demand for money. D) Printing money to cover a budget deficit. E) Contraction fiscal policy. Show Answer Correct Answer: D) Printing money to cover a budget deficit. 14. Causes of BOP imbalance relates to A) (a) Autonomous items. B) (b) Accommodating items. C) Both (a) and (b). D) Neither (a) nor (b). Show Answer Correct Answer: A) (a) Autonomous items. 15. Which of the following deficits indicate the borrowing requirements of the government? A) Revenue Deficit. B) Primary Deficit. C) Fiscal Deficit. D) Effective Revenue Deficit. Show Answer Correct Answer: C) Fiscal Deficit. 16. Which is a supply-side policy that would increase output in the long-run? A) An increase in benefit payments. B) An increase in places at training colleges. C) An increase in the rate of income tax. D) An increase in the rate of tax employers pay. Show Answer Correct Answer: B) An increase in places at training colleges. 17. Who is the propounder of absolute income hypothesis? A) James Dusenberry. B) Milton Friedman. C) J.M.Keynes. D) Albert Ando. Show Answer Correct Answer: C) J.M.Keynes. 18. Fiscal deficit = A) Total expenditure-total receipts other than borrowing. B) Revenue expenditure-revenue receipts. C) Capital expenditure-capital receipts. D) Fiscal deficit-interest payment. Show Answer Correct Answer: A) Total expenditure-total receipts other than borrowing. 19. In Mundell-Fleming model (IS-LM-BP), assuming that the slope of BP is flatter than LM and the exchange rate is fixed. An increase in government spending will cause ..... A) Deficit in BP. B) Capital outflow. C) Exchange rate will be depreciated. D) Surplus in BP. Show Answer Correct Answer: D) Surplus in BP. 20. When the government doesn't have enough money to cover all of the spending in the yearly budget, they can get more money by A) Printing money. B) Selling government bonds. C) Collecting donations. D) None of above. Show Answer Correct Answer: B) Selling government bonds. ← PreviousNext →Related QuizzesEconomics QuizzesMacroeconomics Quiz 1Macroeconomics Quiz 2Macroeconomics Quiz 3Macroeconomics Quiz 4Macroeconomics Quiz 5Macroeconomics Quiz 6Macroeconomics Quiz 7Macroeconomics Quiz 8Macroeconomics Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books