This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Macroeconomics – Quiz 126 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 126 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. ..... refers to the money value of goods and services that all the producers are willing to supply in an economy in a given time period. A) Aggregate demand. B) Aggregate supply. Show Answer Correct Answer: B) Aggregate supply. 2. This reflects those who are actively seeking employment. A) Full employment. B) Unemployment rate. C) Labor force. D) Underemployed. Show Answer Correct Answer: B) Unemployment rate. 3. What is trade embargo? A) A government order that restricts trade within a specified country. B) A government order that restricts prices changing. C) A group of people that work together. D) Lowering prices. Show Answer Correct Answer: A) A government order that restricts trade within a specified country. 4. Macroeconomics as a separate branch of economics, emerged after the British economist John Maynard Keynes published his celebrated book A) The Wealth of Nations. B) On the Principles of political Economy and Taxation. C) The Affluent Society. D) The General Theory of Employment, Interest and Money. Show Answer Correct Answer: D) The General Theory of Employment, Interest and Money. 5. The Keynesian viewpoint suggests that expansionary fiscal policy in an economy with spare capacity: A) Creates growth with inflationary pressures. B) Reduces growth without inflationary pressures. C) Creates growth without inflationary pressures. D) Has no significant impact on growth or inflation. Show Answer Correct Answer: C) Creates growth without inflationary pressures. 6. The short-run Phillips curve shows the relationship between the inflation rate and the A) GDP growth. B) Unemployment rate. C) Employment rate. D) Real interest rate. E) Nominal interest rate. Show Answer Correct Answer: B) Unemployment rate. 7. Which of the following is NOT a function of the Federal Reserve? A) Creating the government's budget. B) Clearing checks. C) Lending banks money. D) Setting the fractional reserve rate. Show Answer Correct Answer: A) Creating the government's budget. 8. A(n) ..... bank trades in financial assets and is not covered by deposit insurance. A) Investment. B) Central. C) Commercial. D) Savings and Loan. Show Answer Correct Answer: A) Investment. 9. A decrease in taxes increases A) PE by $MPC\ \times\Delta T$. B) PE by $\Delta T$. C) PE by $\frac{MPC}{\Delta T}$. D) PE by $\Delta G$. Show Answer Correct Answer: A) PE by $MPC\ \times\Delta T$. 10. How much stuff businesses can make and sell in the whole country at a certain time. A) Aggregate Supply (AS). B) Gross domestic product (GDP). C) Aggregate Demand (AD). D) Potential GDP. Show Answer Correct Answer: A) Aggregate Supply (AS). 11. Economists maintain that ..... is central to the actions of individuals, families and companies. A) Innovation. B) Inflation. C) Marginal cost. D) Scarcity. Show Answer Correct Answer: C) Marginal cost. 12. An increase in government spending financed by borrowing will result in which of the following? A) Private savings will decrease in the short run. B) The real interest rate will decrease in the short run. C) Interest-sensitive private sector spending will increase in the short run. D) Potential real output will increase in the long run. E) The rate of physical capital accumulation will decrease in the long run. Show Answer Correct Answer: E) The rate of physical capital accumulation will decrease in the long run. 13. Will the following scenario affect the current account or capital account, and will the transaction be a debit or credit? An American receives quarterly dividend payments (profits) from stock she owns in a German company. A) Current account; debit. B) Current account; credit. C) Capital account; debit. D) Capital account; credit. Show Answer Correct Answer: B) Current account; credit. 14. Why does the Federal Reserve require banks to keep a percentage of their funds in reserve? A) To buy bonds. B) To balance the budget. C) To supply cash withdrawals. D) To ensure business investment. Show Answer Correct Answer: C) To supply cash withdrawals. 15. How is economic growth defined? A) When a country's population increases. B) When the government spends more money than it collects in taxes. C) When a country makes and sells more goods and services over time. D) When prices for goods and services go down. Show Answer Correct Answer: C) When a country makes and sells more goods and services over time. 16. Alberto is a carpenter. He needs a new saw in order to make more cabinets to sell to his buyers. To do this, he sells a bench he has made, and uses the money to purchase a new saw. What conclusion can you make using this example? A) Alberto is using money as a store of value. B) Alberto is suing money as a unit of account. C) Alberto is using money as a medium of exchange. D) Alberto is using money as a means of deferring payment. Show Answer Correct Answer: C) Alberto is using money as a medium of exchange. 17. If a great ad campaign for Nike shoes comes out featuring baby Yoda, while the price of leather decreases, what will happen to the market for Nike shoes? A) Eq P increases, but we don't know what happens to Eq Q. B) Eq P decreases, but we don't know what happens to Eq Q. C) Eq Q increases, but we don't know what happens to Eq P. D) Eq Q decreases, but we don't know what happens to Eq P. Show Answer Correct Answer: C) Eq Q increases, but we don't know what happens to Eq P. 18. Microeconomics looks at the economy through a ..... A) Mirror. B) Spectacles. C) Microscope. D) Lens. Show Answer Correct Answer: C) Microscope. 19. Define fiscal policy. A) Any action taken by the government or monetary authorities (Monetary Policy Committee in the Bank of England) to shift the AD curve. B) Involves the manipulation of monetary variables in order achieve government objectives. C) Involves the government running a government or fiscal deficit (budget deficit). D) Any action taken by the government or monetary authorities (Monetary Policy Committee in the Bank of England) to shift the AS curve. Show Answer Correct Answer: C) Involves the government running a government or fiscal deficit (budget deficit). 20. Irrational decision maker takes an action if and only if A) The marginal benefit of the action exceeds the marginal cost of the action. B) The marginal cost of the action exceeds the marginal benefit of the action. C) The marginal cost of the action is zero. D) The opportunity cost of the action of zero. E) The marginal benefit of the action is maximized. Show Answer Correct Answer: A) The marginal benefit of the action exceeds the marginal cost of the action. ← 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