This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Macroeconomics – Quiz 130 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 130 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The word micro means ..... A) Big. B) Large. C) Small. D) None of above. Show Answer Correct Answer: C) Small. 2. Things that you can hold in your hand and buy. Physical objects (ie:apples, bread, tires) A) Goods. B) Services. C) Producer. D) Consumer. Show Answer Correct Answer: A) Goods. 3. Assume that the marginal propensity to consume is 0.90. As a result of an increase in the tax rates, the government collects an additional $ 20 million. What will be the impact on gross domestic product (GDP)? A) GDP will increase by a maximum of $ 200 million. B) GDP will increase by a maximum of $ 180 million. C) GDP will decrease by a maximum of $ 200 million. D) GDP will decrease by a maximum of $ 180 million. E) GDP will decrease by a maximum of $ 20 million. Show Answer Correct Answer: D) GDP will decrease by a maximum of $ 180 million. 4. The key word "save" describes which role of money? A) Unit of account/standard of value. B) Store of value. C) Medium of exchange. D) None of above. Show Answer Correct Answer: B) Store of value. 5. Why is the Consumer Price Index so important? A) The CPI measures changes in price level, allowing investors to monitor the inflation rate and adjust their investments. B) The CPI measures changes in consumer spending, allowing investors to monitor consumer confidence and adjust their investments. C) The CPI measures changes in cyclical unemployment, allowing the government to monitor the unemployment rate and make needed policy changes. D) The CPI measures changes in gross domestic product, allowing the government to monitor the economic growth rate and make needed policy changes. Show Answer Correct Answer: A) The CPI measures changes in price level, allowing investors to monitor the inflation rate and adjust their investments. 6. Which type of unemployment would increase if workers lost their jobs because of a recession A) Cyclical. B) Frictional. C) Structural. D) Seasonal. E) Search. Show Answer Correct Answer: A) Cyclical. 7. A form of business where you rent or lease the name, business profile, and way of doing business from the owner A) PARTNERSHIP. B) CORPORATION. C) SOLE PROPRIETORSHIP. D) FRANCHISE. Show Answer Correct Answer: D) FRANCHISE. 8. A command economy is best defined as A) An economic system with a central authority that makes major economic decisions. B) An economic system in which supply, demand, and the price system help people make economic decisions. C) An Economic system in which private citizens own and use the factors of production in order to generate profits. D) An economic system that has some combination of traditional, command, and market activities. Show Answer Correct Answer: A) An economic system with a central authority that makes major economic decisions. 9. Which of the following is a function of a commercial bank? A) Banknote printing. B) Create and destroy deposits. C) Control the amount of money in the economic system. D) All wrong. Show Answer Correct Answer: B) Create and destroy deposits. 10. What is Consumer Price Index used for? A) To measure Market Structures. B) To measure GDP. C) Measures changes in price of goods and services. D) Measure money, measure products at the same dang time. Show Answer Correct Answer: C) Measures changes in price of goods and services. 11. Lowering interest rates to stimulate the economy is called: A) Tight fiscal policy. B) Tight monetary policy. C) Loose monetary policy. D) Loose fiscal policy. Show Answer Correct Answer: C) Loose monetary policy. 12. Carla bakes a cake and sells it to Norm for $ 10. Sam pays Diane $ 30 to tutor him. In this economy, GDP is ..... A) $ 10. B) $ 20. C) $ 30. D) $ 40. Show Answer Correct Answer: D) $ 40. 13. Which below is NOT the advantages of international trade? A) Act as a engine of growth. B) Decrease the quality of local goods. C) Enable countries to obtain benefits from specialization. D) Decreasing cost through large scale production. Show Answer Correct Answer: B) Decrease the quality of local goods. 14. Buying bonds A) Increases money supply. B) Decreases money supply. Show Answer Correct Answer: A) Increases money supply. 15. How does a decrease in the price level affect real wealth and aggregate demand? A) Real wealth increases; the quantity of aggregate demand decreases. B) Real wealth decreases; aggregate demand increases. C) Real wealth increases; aggregate demand increases. D) Real wealth increases; the quantity of aggregate demand increases. E) Real wealth decreases; the quantity of aggregate demand increases. Show Answer Correct Answer: D) Real wealth increases; the quantity of aggregate demand increases. 16. When the amount of income received falls short of the amount of expenses paid. A) Budget deficit. B) Budget surplus. Show Answer Correct Answer: A) Budget deficit. 17. Explaining how the economy can self-correct during an economic downturn A) Macroeconomics. B) Microeconomic. Show Answer Correct Answer: A) Macroeconomics. 18. Too much capital:k*>k*gold A) Reduce saving rate to reduce kincrease C;decrease I;decrease output. B) Increase saving rate to reduce kincrease C;decrease I;decrease output. C) Increase saving rate to reduce kincrease C;decrease I;in output. D) Reduce saving rate to increase kincrease C;decrease I;decrease output. Show Answer Correct Answer: A) Reduce saving rate to reduce kincrease C;decrease I;decrease output. 19. The FOMC simulation covered which part of the monetary policy tools? A) Reserve requirments. B) Interest on Required and Excess Reserves. C) Discount Rate. D) Open Market Opersations. Show Answer Correct Answer: D) Open Market Opersations. 20. Long Run Phillips Curve A) Wages and Resource Costs will increase as price levels increase. B) Measures the effect of the economy on inflation and unemployment with an inverse relationship. C) No tradeoff between inflation and unemployment, represented by a vertical line at the NRU. D) Government spending might cause unintended effects that weaken the impact of the policy. E) Wages and Resource Costs will not increase as price levels increase. Show Answer Correct Answer: C) No tradeoff between inflation and unemployment, represented by a vertical line at the NRU. ← 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