This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Macroeconomics – Quiz 134 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 134 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. If the reserve ratio is 10 percent, banks do not hold excess reserves, and people donot hold currency, then when the BNM purchases RM20 million of governmentbonds, bank reserves A) Increase by RM20 million and the money supply eventually increases byRM200 million. B) Decrease by RM20 million and the money supply eventually increases byRM200 million. C) Increase by RM20 million and the money supply eventually decreases byRM200 million. D) Decrease by RM20 million and the money supply eventually decreases byRM200 million. Show Answer Correct Answer: A) Increase by RM20 million and the money supply eventually increases byRM200 million. 2. In a ..... budget, revenues and expenses are equal. A) Balanced. B) Deficit. C) Surplus. D) None of above. Show Answer Correct Answer: A) Balanced. 3. During an expansion, the Fed should use ..... A) An expansionary policy. B) A contractionary policy. Show Answer Correct Answer: B) A contractionary policy. 4. What would a microeconomist most likely study? A) The relationship between the size of the money supply and the rate of inflation. B) The effects of aggregate consumer debt on overall consumption spending. C) The effects of an income tax reduction on the size of the national budget deficit. D) How consumers respond to a change in gasoline prices. Show Answer Correct Answer: D) How consumers respond to a change in gasoline prices. 5. A monopoly is when: A) One seller/business dominates an industry. B) A few sellers/businesses dominate an industry. C) Supply exceeds demand. D) A business offers special gifts and coupons. Show Answer Correct Answer: A) One seller/business dominates an industry. 6. Which of the following is not classed as capital expenditure? A) Purchasing capital equipment for state-owned enterprise. B) Purchasing new materials for production. C) Building of new public roads. D) Construction of a new airport. Show Answer Correct Answer: B) Purchasing new materials for production. 7. What is a Government Budget DEFICIT? A) When the amount of income received by the government falls short of the amount of expenses paid by the government. B) When the amount of income received by the government exceeds the amount of expenses paid by the government. C) The monetary policy making body of the Federal Reserve System. D) The central bank of the United States. Show Answer Correct Answer: A) When the amount of income received by the government falls short of the amount of expenses paid by the government. 8. A line that shows the relationship between price and quantity supplied on a graph, with quantity supplied on the horizontal axis and price on the vertical axis A) Social surplus. B) Supply curve. C) Total surplus. D) Shortage. Show Answer Correct Answer: B) Supply curve. 9. The economy is in a recessionary gap. What type of open market operation is appropriate? A) Buy bonds. B) Sell bonds. C) Increase the reserve requirement. D) Decrease the reserve requirement. Show Answer Correct Answer: A) Buy bonds. 10. Ygritte loaned Mans $ 100. Mans paid her back $ 110one year later. The annual rate of inflation was 3%.What was the real interest rate that Ygritte earned on this loan? A) $ 10. B) 10%. C) $ 100. D) 7%. E) 3%. Show Answer Correct Answer: D) 7%. 11. If the inflation rate is rising too fast, which fiscal policy would make MOST sense? A) Increase taxes. B) Decrease taxes. C) Increase spending. D) Decrease bank reserves. Show Answer Correct Answer: A) Increase taxes. 12. Choose the CORRECT answer for four (4) phases of business cycle. A) Expansion, Profits, Decline, Bankruptcy. B) Peak, Profit, Decline, Bankruptcy. C) Peak, Recession, Through, Recovery. D) Peak, Recession, Expansion, Through. Show Answer Correct Answer: C) Peak, Recession, Through, Recovery. 13. At what age are workers eligible for early retirement benefits through the Social Security system? A) 55. B) 60. C) 62. D) 65. Show Answer Correct Answer: C) 62. 14. How do automatic stabilizers work, both on the taxation side and on the spending side, in a situation where the economy is producing more than potential GDP? A) Automatic stabilizers decrease taxes and increase government spending to prevent overheating in an economy producing more than potential GDP. B) Automatic stabilizers have no effect on taxes and government spending in an economy producing more than potential GDP. C) Automatic stabilizers reduce taxes and increase government spending, exacerbating overheating in an economy producing more than potential GDP. D) Automatic stabilizers increase taxes and reduce government spending to prevent overheating in an economy producing more than potential GDP. . Show Answer Correct Answer: D) Automatic stabilizers increase taxes and reduce government spending to prevent overheating in an economy producing more than potential GDP. . 15. The ..... shows the relationship between the quantity of money supplied and the interest rate. A) Money Supply Curve. B) Money Demand Curve. C) Loanable Funds Market. D) Fisher Effect. Show Answer Correct Answer: A) Money Supply Curve. 16. Movement along a supply curve demonstrates A) A change in quantity supplied. B) A change in quantity demanded. C) A change in supply. D) A change in demand. Show Answer Correct Answer: A) A change in quantity supplied. 17. What part of the business cycle is labeled as #2 A) Peak. B) Trough. C) Contraction/Recession. D) Expansionary/Recovery. Show Answer Correct Answer: C) Contraction/Recession. 18. The expenditure by all levels of government on goods and services A) Imports of goods and services. B) Investment. C) Consumer expenditure. D) Government expenditure on goods and services. Show Answer Correct Answer: D) Government expenditure on goods and services. 19. 'Unemployment has begun to rise in the UK. What should policy makers do? Already the Bank of England has cut interest rates. Also, the government has begun to spend more without covering all of the increase by a rise in taxes.'It can be inferred from the data that in response to rising unemployment A) Both monetary policy and fiscal policy are expansionary. B) Monetary policy is expansionary whilst fiscal policy is contractionary. C) Monetary policy is contractionary whilst fiscal policy is expansionary. D) Both monetary policy and fiscal policy are contractionary. Show Answer Correct Answer: A) Both monetary policy and fiscal policy are expansionary. 20. A ..... tax, also referred to as a flat tax, impacts low-, middle-and high-income earners relatively equally. A) Regressive. B) Proportional. C) Income. D) None of above. Show Answer Correct Answer: B) Proportional. ← 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