This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Macroeconomics – Quiz 207 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 207 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. According to the ....., international differences in real GDP per capita tend to narrow over time. A) Convergence Hypothesis. B) Divergence Hypothesis. C) Real GDP Hypothesis. D) GDP per Capita Hypothesis. Show Answer Correct Answer: A) Convergence Hypothesis. 2. Which of the following would someone interested in free trade support? A) Tariffs. B) Embargo. C) NAFTA. D) NATO. Show Answer Correct Answer: C) NAFTA. 3. Which of the following is a contractionary Fiscal Policy measure? A) Increase in government spending. B) Decrease in taxes. C) Increase in transfer payments. D) Increase in tax rates. Show Answer Correct Answer: D) Increase in tax rates. 4. According to the short-run Phillips curve, a contractionary fiscal policy will result in A) A decrease in both unemployment and prices. B) A decrease in inflation and an increase in unemployment. C) A decrease in both wage rates and unemployment. D) An increase in both wage rates and unemployment. E) An increase in unemployment due to crowding out. Show Answer Correct Answer: B) A decrease in inflation and an increase in unemployment. 5. Which of the following is considered contractionary fiscal policy? A) Congress increases the income tax rate. B) The New Jersey legislature cuts highway spending to balance its budget. C) Congress increases defense spending. D) Legislation removes a college tuition deduction from federal income taxes. Show Answer Correct Answer: A) Congress increases the income tax rate. 6. Macroeconomics is the study of economics from the view point of A) The entire economy. B) Individual and firms spending. C) The individual household. D) Local government expenditure. Show Answer Correct Answer: A) The entire economy. 7. Scarcity means: A) Too much of something you wanted. B) The exact amount of something you wanted. C) Not enough of something you wanted. D) None of above. Show Answer Correct Answer: C) Not enough of something you wanted. 8. Purchasing power parity theory is not always accurate because..... A) Goods are not easy to produce. B) Goods produced in different countries are not always perfect substitutes. C) Each country can easily imitate goods produced by other countries. D) The use of the internet allows all goods to be traded. Show Answer Correct Answer: B) Goods produced in different countries are not always perfect substitutes. 9. What is a consumer? A) Someone who makes and sells goods and services. B) Someone who buys and uses goods and services. C) Someone who thinks of ideas about goods and services. D) Someone who enjoys the use of goods and services. Show Answer Correct Answer: B) Someone who buys and uses goods and services. 10. The economy seems to be doing really well. Almost everyone has a job, which is good, but it's leading to inflation. If the Chair of the Federal Reserve wants to decrease the inflation rate, which policy should they choose? A) Lower the Federal Funds Rate. B) Raise the Federal Funds Rate. Show Answer Correct Answer: B) Raise the Federal Funds Rate. 11. What is the total value of all final goods and services produced in an economy called? A) Microeconomics. B) Macroeconomics. C) Gross Domestic Product (GDP). D) Business Cycle. Show Answer Correct Answer: C) Gross Domestic Product (GDP). 12. The U.S. national debt: A) Is the same as our deficit. B) Is less than our deficit. C) Is owed to people who have bought U.S. government bonds and each year's deficit adds to the total number. D) Is around 16 trillion dollars. Show Answer Correct Answer: C) Is owed to people who have bought U.S. government bonds and each year's deficit adds to the total number. 13. What did Adam Smith think was most economic? A) Prison. B) Communism. C) Capitalism. D) Inflation. Show Answer Correct Answer: C) Capitalism. 14. If the economy was in a recessionary gap, to return to RGDP, the government could A) Decrease taxes and increase government purchases. B) Increase taxes and increase government purchases. C) Decrease taxes and decrease government purchases. D) Do all of the above. Show Answer Correct Answer: A) Decrease taxes and increase government purchases. 15. If the equilibrium price of a taxi ride is $ 30, but a taxi company tried to charge $ 40 for rides, this would result in a ..... in taxis because quantity supplied is ..... than quantity demanded. A) Shortage lower. B) Shortage higher. C) Surplus lower. D) Surplus higher. Show Answer Correct Answer: D) Surplus higher. 16. Which of the following NOT considered mandatory spending? A) Medicare. B) National parks. C) Assistance for low-income families. D) Social security. Show Answer Correct Answer: B) National parks. 17. With an MPS of 0.2, an increase in government spending of $ 240 m will result in the equilibrium level of income rising by A) $ 1200m. B) $ 480m. C) $ 960m. D) $ 2400m. Show Answer Correct Answer: A) $ 1200m. 18. The GDP Deflator / GDP Deflator is a description of the difference between the increase in Nominal GDP which is greater than Real GDP due to price increases. The relationship between Nominal GDP, Real GDP, and GDP Deflator can be written using the formula..... A) Pt = Ct / It. B) Bit = $ it/it. C) $ Yt = Pt x Ct. D) $ Yt = Ct x $ C. Show Answer Correct Answer: B) Bit = $ it/it. 19. What does it mean to be diversified? A) Having as much money in bonds as you do in stocks. B) Having investments that react differently to market or economic events. C) Owning at least 20 stocks in whatever industry you think you own best. D) Having a financial advisor. Show Answer Correct Answer: B) Having investments that react differently to market or economic events. 20. What is a cartel? A) When people get together and pray. B) A group of producers that work together to protect their interests. C) A group of people who make corn bread. D) A group of producers that don't work together. Show Answer Correct Answer: B) A group of producers that work together to protect their interests. ← 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