This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Macroeconomics – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 2 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Right to own private property is found in A) Socialism. B) Capitalism. C) Mixed economy. D) Both B and C. Show Answer Correct Answer: D) Both B and C. 2. John is studying economics and he came across a term that represents the percentage of a nation's labor force that is unemployed. Can you help him identify the term? A) Gross Domestic Product. B) Inflation. C) Unemployment. D) Consumer Price Index. Show Answer Correct Answer: C) Unemployment. 3. Who does outsourcing hurt economically? A) American workers/home country. B) American company owners/CEOs. C) Workers in other countries. D) Video Gamers. Show Answer Correct Answer: A) American workers/home country. 4. Which of the following best describes why the money supply curve is vertical? A) Individuals hold less money when interest rates increase. B) The central bank responds to increases in the interest rate by increasing the quantity of money supplied. C) Central banks determine the monetary base independent of the interest rate. D) Savers want to supply more money when interest rates are high. E) The central bank sets interest rates and changes the quantity of money accordingly. Show Answer Correct Answer: C) Central banks determine the monetary base independent of the interest rate. 5. Explain the concept of aggregate demand and aggregate supply. A) Aggregate demand is the total demand for goods and services in an economy, while aggregate supply is the total supply of goods and services that producers are willing and able to provide. B) Aggregate demand is the total demand for goods and services in an economy, while aggregate supply is the total supply of goods and services that government agencies are willing and able to provide. C) Aggregate demand is the total demand for goods and services in an economy, while aggregate supply is the total supply of goods and services that consumers are willing and able to provide. D) Aggregate demand is the total demand for goods and services in a specific industry, while aggregate supply is the total supply of goods and services in the entire economy. Show Answer Correct Answer: A) Aggregate demand is the total demand for goods and services in an economy, while aggregate supply is the total supply of goods and services that producers are willing and able to provide. 6. A ..... is a formula that determines the central bank's actions. A) Monetary Policy Rule. B) Discretionary Monetary Policy. C) Political Business Cycle. D) Macroeconomic Policy Activism. Show Answer Correct Answer: A) Monetary Policy Rule. 7. When a price ceiling is in place keeping the price below the market price, which is true of the quantity demanded & quantity supplied? A) Quantity Demanded is greater. B) Quantity Demanded equals Quantity supplied. C) Quantity Supplied is greater. D) None of above. Show Answer Correct Answer: A) Quantity Demanded is greater. 8. ..... are the currency that banks hold in their vaults plus their deposits at the Federal Reserve. A) Bank Reserves. B) Reserve Ratio. C) Required Reserve Ratio. D) Reserve Requirements. Show Answer Correct Answer: A) Bank Reserves. 9. Which of the following groups suffer from high inflation A) Borrowers. B) Lenders. C) Taxpayers. D) Property Investors. Show Answer Correct Answer: B) Lenders. 10. Which of the following is a reason why fruit would not be viable form of money? A) Money can only be in the form of paper currency. B) They have no store of value. Show Answer Correct Answer: B) They have no store of value. 11. Ceteris Paribus, or "all other things held constant" is an assumption that has which of the following effects on a demand schedule. A) It takes ONLY price into account. B) It considers the effects of all possible changes on demand. C) It is accurate no matter what changes occur. D) It is accurate only at one price level. Show Answer Correct Answer: A) It takes ONLY price into account. 12. During a recession, which of the following is likely to occur? A) An increase in real wages. B) An increase in production. C) And increase in the GDP growth rate. D) An increase in the unemployment rate. Show Answer Correct Answer: D) An increase in the unemployment rate. 13. When foreign interest rate higher than domestic interest rate, what is the consequences? A) Domestic residents will buy foreign assets. B) Foreign residents will buy domestic assets. C) Domestic residents will buy domestic assets. D) Foreign residents will buy assets. Show Answer Correct Answer: A) Domestic residents will buy foreign assets. 14. With the economy in a recession because of inadequate aggregate demand, the government increases its purchases by $ 1, 200. Suppose the central bank adjusts the money supply to hold the interest rate constant, investment spending is fixed, and the marginal propensity to consume is 2/3. How large is the increase in aggregate demand? A) $ 400. B) $ 800. C) $ 1, 800. D) $ 3, 600. Show Answer Correct Answer: D) $ 3, 600. 15. These are from dollar remittances and these are sold to the central bank for pesos through commercial banks based on a fixed exchange rate prescribed. A) Rediscounting. B) Government securities. C) Balance of trade. D) Foreign currency inflaws. Show Answer Correct Answer: D) Foreign currency inflaws. 16. Businesses provide government with ..... A) Taxes. B) Sales. C) Private goods & services. D) Interest. Show Answer Correct Answer: A) Taxes. 17. A stock variable: A) Has no time dimension. B) Is a static concept. C) Both (a) and (b). D) None of these. Show Answer Correct Answer: C) Both (a) and (b). 18. If Congress increases government spending by the same amount it increases taxes aggregate demand will A) Remain the same. B) Decrease, these are both contractionary. C) Increase. D) Shift down. Show Answer Correct Answer: C) Increase. 19. Coach Russo pays a tax each year of $ 3500 that is based off the value of his family's home. Which type of tax is he paying? A) Payroll Tax. B) Income Tax. C) Sales Tax. D) Property Tax. Show Answer Correct Answer: D) Property Tax. 20. When there is too much money in the economy, what happens during an inflation period? A) Purchasing power goes down, it costs more to buy goods and services. B) Purchasing power goes down, it costs less to buy goods and services. C) Purchasing power goes up, it costs more to buy goods and services. D) Purchasing power goes up, it costs less to buy goods and services. Show Answer Correct Answer: A) Purchasing power goes down, it costs more to buy goods and services. ← PreviousNext →Related QuizzesEconomics QuizzesMacroeconomics Quiz 1Macroeconomics Quiz 3Macroeconomics Quiz 4Macroeconomics Quiz 5Macroeconomics Quiz 6Macroeconomics Quiz 7Macroeconomics Quiz 8Macroeconomics Quiz 9Macroeconomics Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books