This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Macroeconomics – Quiz 154 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 154 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is the correct definition for supply-side policy: A) A policy which increases the productive potential of the economy. B) A policy to improve the number of people who can work. C) A policy which increases the number of jobs available in the economy. D) A policy which decreases the productive potential of the economy. Show Answer Correct Answer: A) A policy which increases the productive potential of the economy. 2. Which of the following would increase the value of the simple spending multiplier A) An increase in government expenditure. B) An increase in exports. C) A decrease in government unemployment benefits. D) A decrease in the marginal propensity to consume. E) A decrease in the marginal propensity to save. Show Answer Correct Answer: E) A decrease in the marginal propensity to save. 3. Phase of the business cycle when it could be said that Real GDP is at its highest point, the economy is close to full employment, and the price level is increasing. A) Peak. B) Recession. C) Trough. D) Recovery. Show Answer Correct Answer: A) Peak. 4. Which of the following actions would most likely lead to a shift to the left of the short-run Phillips curve, or SRPC? A) A strong central bank commitment to reducing inflation. B) A strong central bank commitment to decreasing cyclical unemployment. C) A strong government commitment to engage in expansionary fiscal policy. D) A strong central bank commitment to increasing the money supply. E) A strong government commitment to reducing structural unemployment. Show Answer Correct Answer: A) A strong central bank commitment to reducing inflation. 5. Economic policies that involve government spending and taxes A) Fiscal Policy. B) Traditional Economy. C) Monetary Policy. D) Regulatory Policy. Show Answer Correct Answer: A) Fiscal Policy. 6. The Phillips Curve shows the tradeoff between A) Inflation and unemployment. B) Supply and demand. C) Two production options. D) Price level and GDP. Show Answer Correct Answer: A) Inflation and unemployment. 7. The largest sector of the macroeconomy is the A) Investment sector. B) Government sector. C) Foreign sector. D) Consumer sector. Show Answer Correct Answer: D) Consumer sector. 8. Which of the following actions would increase the money supply? A) A bank issues a new loan to a customer. B) A child burns a $ 10 bill. C) A woman deposits cash into her savings account. D) A man deposits cash into his checking account. Show Answer Correct Answer: A) A bank issues a new loan to a customer. 9. The money demand function (M/P)D =1000-100r. With M=1000 and P=2, the real money supply (M/P)S =500. What is the equilibrium interest rate? A) R = 5. B) R = 10. C) R = 2. D) R = 6. Show Answer Correct Answer: A) R = 5. 10. Cyclical unemployment A) Describes recent college graduates. B) Lasts longer than 6 months. C) Describes employees moving from one job to another. D) Increases inflation Increases inflation. Show Answer Correct Answer: B) Lasts longer than 6 months. 11. Describe the effects of the government's economic response to Covid A) Price level remains constant (PL1=PL1) and employment increases (Yf>Y1). B) Price level remains constant (PL1=PL1) and employment decreases (Yf C) Price level remains constant (PL1=PL1) and employment remains constant (Yf=Yf). D) Price level increases (PL1>PL1) and employment decreases (Yf Show Answer Correct Answer: A) Price level remains constant (PL1=PL1) and employment increases (Yf>Y1). 12. Stagflation A) Output is low and unemployment is more than NRU. Actual GDP is below potential GDP. B) Laws that reduce inflation, decrease GDP (Close an Inflationary Gap)-G or + taxes (-C). C) Output is high and unemployment is less than NRU. Actual GDP is above potential GDP. D) A gap with higher prices and a decrease in GDP. E) Laws that reduce unemployment and increase GDP (Close a Recessionary Gap) + G or-taxes (+C). Show Answer Correct Answer: D) A gap with higher prices and a decrease in GDP. 13. Which of the following would cause the US dollar to depreciate relative to the Canadian dollar? A) An increase in net capital flows from Canada to the US. B) An increase in the real interest rate in Canada relative to the US. C) A decrease in exports from Canada to the US. D) A doubling of prices in both Canada and the US. E) An increase in the balance of payments on the current account in the US. Show Answer Correct Answer: B) An increase in the real interest rate in Canada relative to the US. 14. Y =C + ( K)K is refers to A) Consumption. B) Investment. C) Saving. D) Export. Show Answer Correct Answer: C) Saving. 15. Which answer describes changes in the U.S. money supply BEFORE the establishment of the Federal Reserve System? A) The money supply was constant and unchanging. B) The money supply could change dramatically and unexpectedly. C) Only the president could change the supply of money available. D) There were no important differences between the money supply then and now. Show Answer Correct Answer: B) The money supply could change dramatically and unexpectedly. 16. Who is in responsible for the private local banks? A) The Fed. B) The Chariman. C) The Presidents of the 12 district banks. D) The 12 district banks. Show Answer Correct Answer: D) The 12 district banks. 17. How will labour unions affect an employee? A) They negotiate the working conditions and wages received. B) Support restrictions on imported goods through quotas and tariffs. C) The prices of products raise to a higher amount. D) They don't affect an employee. Show Answer Correct Answer: A) They negotiate the working conditions and wages received. 18. Which of the following are components of the macroeconomics? A) Land. B) Foreign Sector. C) Capital. D) Labor. Show Answer Correct Answer: B) Foreign Sector. 19. Keynesian thinking is called- A) Classical doctrine. B) Structuralism. C) Monetarism. D) Revolutionary (Radical) doctrine. Show Answer Correct Answer: B) Structuralism. 20. Combination of inflation and a stagnate economy A) Stagflation. B) Aggregate Supply. C) Inflation. D) Aggregate Demand. Show Answer Correct Answer: A) Stagflation. ← 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