This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Macroeconomics – Quiz 12 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 12 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Shortest lifespan A) Sole Proprietorship. B) Partnership. C) Corporation. D) Limited Liability Partnership. Show Answer Correct Answer: A) Sole Proprietorship. 2. Supply-side economists argue that A) A cut in high tax rates results in an increased deficit and thus increases aggregate supply. B) Lower tax rates provide positive work incentives and thus shift the aggregate supply curve to the right. C) The aggregate supply of goods can only be increased if the price level falls. D) Increased government spending should be used to stimulate the economy. E) The government should regulate the supply of imports. Show Answer Correct Answer: B) Lower tax rates provide positive work incentives and thus shift the aggregate supply curve to the right. 3. In one year, spending on consumption, investment, and government purchases was equal to 103 percent of a country's gross domestic product. This would be possible only if A) The money supply increased. B) Net exports were positive. C) Net exports were negative. D) The government ran a budget surplus. E) The government had a balanced budget. Show Answer Correct Answer: C) Net exports were negative. 4. Discount rate A) Interest rate that the Fed charges on its loans to member banks. B) The percent of deposits that banks have to have set aside in cash at any given time. C) Spending for federal programs that must receive approval each year. D) Total market value of all final, new goods and services produced in a country during a single year. Show Answer Correct Answer: A) Interest rate that the Fed charges on its loans to member banks. 5. What is happening to the economy in a period of economic contraction? A) GDP is rising and unemployment is falling. B) GDP is rising and unemployment is rising. C) GDP is falling and unemployment is rising. D) GDP is falling and unemployment is falling. Show Answer Correct Answer: C) GDP is falling and unemployment is rising. 6. Unemployed because employers need their type of human capital during only one part of the year. A) Cyclical. B) Frictional. C) Structural. D) Seasonal. Show Answer Correct Answer: D) Seasonal. 7. A major advantage of automatic stabilizers in fiscal policy is that they A) Reduce the public debt. B) Increase the possibility of a balanced budget. C) Stabilize the unemployment rate. D) Go into effect without passage of new legislation. E) Automatically reduce the inflation rate. Show Answer Correct Answer: D) Go into effect without passage of new legislation. 8. . How do the expansionary and contractionary monetary policy affect the quantity of money? A) Expansionary and contractionary monetary policy have no effect on the quantity of money. B) Contractionary monetary policy increases the quantity of money. C) Expansionary monetary policy decreases the quantity of money. D) Expansionary monetary policy increases the quantity of money, while contractionary monetary policy decreases the quantity of money. Show Answer Correct Answer: D) Expansionary monetary policy increases the quantity of money, while contractionary monetary policy decreases the quantity of money. 9. The government implements contractionary monetary policy when recession occurs. A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 10. The transaction demand for money is very closely associated with money's use as a A) Store of value. B) Standard unit of account. C) Measure of value. D) Medium of exchange. E) Standard of deferred payment. Show Answer Correct Answer: D) Medium of exchange. 11. Seasonal unemployment A) Describes recent college graduates. B) Is predictable. C) Is a result of changes in technology. D) Slows the economy Slows the economy. Show Answer Correct Answer: B) Is predictable. 12. A market structure where a few businesses control the selling of a product ..... A) Monopoly. B) Oligopoly. C) Pure or perfect competition. D) Monopolistic. Show Answer Correct Answer: B) Oligopoly. 13. Canada has nationalized health care, so that everyone has some access to health care. Based on this, Canada has decided that "everyone, regardless of their ability to pay" is the answer to what microeconomic question? A) What type of health care will be produced and in what quantity?. B) How will health care be produced?. C) For whom will health care be produced?. D) Why will we offer health care?. Show Answer Correct Answer: C) For whom will health care be produced?. 14. When the US dollar depreciates, AD will? A) Increase. B) Decrease. C) Remain unchanged. D) None of above. Show Answer Correct Answer: A) Increase. 15. The actions of the FED that controls and regulate the amount of money in the economy are referred to as A) Monetary policy. B) Fiscal policy. C) International trade. D) Opportunity costs. Show Answer Correct Answer: A) Monetary policy. 16. What happens to a nation's imports or exports of a product when the world price of the product rises above the domestic price? A) Imports of the product increase. B) Imports of the product stay the same. C) Exports of the product increase. D) Exports of the product decrease. Show Answer Correct Answer: C) Exports of the product increase. 17. A simple consumption theory only bases the size of consumption on the size of income, even though consumption expenditure is also influenced by: A) Wealth level, Socioeconomic, Price level. B) Socioeconomic, Price level, Tastes. C) Price level, Tastes, Interest rate. D) All wrong. E) All true. Show Answer Correct Answer: E) All true. 18. All of the following are components of GDP Except A) C-consumer. B) I-Business and Investment. C) G-Government. D) X-Net Foreign Investments. E) L-Labor. Show Answer Correct Answer: E) L-Labor. 19. Inventories rise when: A) Actual demand for output is more than expected. B) Actual demand for output is less than expected. C) Actual supply of output is less than expected. D) Actual demand for output is about the same as expected. Show Answer Correct Answer: B) Actual demand for output is less than expected. 20. What is a microeconomic decision? A) A central bank reducing interest rates. B) A gas firm reducing its prices. C) A government increasing income tax. D) A government increasing the national minimum wage. Show Answer Correct Answer: B) A gas firm reducing its prices. ← 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