This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Macroeconomics – Quiz 220 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 220 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which one of the following best describes how an initial change in expenditure leads to a larger impact upon the level of national income? A) The accelerator process. B) Fiscal policy. C) Cost-push inflation. D) The multiplier effect. Show Answer Correct Answer: D) The multiplier effect. 2. The LM curve reflects equilibrium in the ..... market. A) Money. B) Capital. C) Money. D) Textile. Show Answer Correct Answer: A) Money. 3. Which of the following groups has the most control in a command economy? A) Private companies. B) Consumers. C) Charities. D) The government. Show Answer Correct Answer: D) The government. 4. The choice of method for calculating national income depends on A) Availability of data. B) Expertism for calculation. C) Availability of data, expertism of data and level of economy. D) Non of above. Show Answer Correct Answer: C) Availability of data, expertism of data and level of economy. 5. If net investment is positive then: A) Gross investment is less than depreciation. B) The nation's capital stock will shrink. C) The nation's PP curve will shift to the right. D) The nation's current production point will move inside its PP curve. Show Answer Correct Answer: C) The nation's PP curve will shift to the right. 6. The total amount of money that the government owes through the buildup of deficits. A) Tresaury bills. B) Treasury bonds. C) Budget deficit. D) National debt. Show Answer Correct Answer: D) National debt. 7. Ceteris paribus, the quantities of money people are willing and able to hold A) Decrease as interest rates fall. B) Increase as interest rates fall. C) Increase as the money supply decreases. D) Decrease when the speculative demand increases. Show Answer Correct Answer: B) Increase as interest rates fall. 8. An example of a macroeconomic policy question would be "Can goverments promote long-run economic growth" ? A) True. B) False. Show Answer Correct Answer: A) True. 9. Assuming the reserve requirement is 20 percent and commercial banks have no excess reserves initially, the commercial banking system could increase the money supply by a maximum of $ 1, 000, 000 if the Federal Reserve Banks would A) Buy $ 250, 000 of securities from commercial banks. B) Sell $ 1, 000, 000 of securities to commercial banks. C) Buy $ 1, 000, 000 of securities from commercial banks. D) Buy $ 200, 000 of securities from commercial banks. E) Sell $ 200, 000 of securities to commercial banks. Show Answer Correct Answer: C) Buy $ 1, 000, 000 of securities from commercial banks. 10. What is the relationship between aggregate demand and aggregate supply? A) Aggregate supply is determined by aggregate demand. B) Aggregate demand is determined by aggregate supply. C) Aggregate demand and aggregate supply have no relationship. D) The relationship between aggregate demand and aggregate supply determines the equilibrium level of output and price level in an economy. Show Answer Correct Answer: D) The relationship between aggregate demand and aggregate supply determines the equilibrium level of output and price level in an economy. 11. In writing the government budget, most of the budget pays for government entitlements which cannot be changed. A) True. B) False. Show Answer Correct Answer: A) True. 12. Which answer below is something that the Central Bank does NOT do? A) Buy/sell bonds. B) Increase/decrease interest rate. C) Increase/decrease income tax rates. D) Increase/decrease reserve requirement. Show Answer Correct Answer: C) Increase/decrease income tax rates. 13. Keynes' theory of demand for savings is related to which variable below? A) Household income. B) Interest rate. C) Foreign exchange rates. D) All the points are correct. Show Answer Correct Answer: B) Interest rate. 14. What term best describes the total demand for final goods and services at a range of price levels during a stated period of time? A) Aggregate Supply. B) Total Supply. C) Total Demand. D) Aggregate Demand. Show Answer Correct Answer: D) Aggregate Demand. 15. Open economy model of AD includes A) Capital account transactions. B) Interest rate gap. C) Net exports. D) All of the above. Show Answer Correct Answer: C) Net exports. 16. In fixed exchange rate, when Ringgit currency is overvalued, central bank will be: A) Sell foreign exchange by using foreign reserve asset in foreign. B) Buy foreign exchange by using foreign reserve asset in Malaysia. C) Buy foreign exchange by increasing the money supply. D) Sell foreign exchange by using foreign reserve asset in Malaysia. Show Answer Correct Answer: B) Buy foreign exchange by using foreign reserve asset in Malaysia. 17. Statement which describes the world as it is A) Positive statement. B) Utility. C) Normative statement. D) Sunk cost. Show Answer Correct Answer: A) Positive statement. 18. Match the following description with the factor that impacts growth in developing nations:Some countries enforce strict gender roles while don't permit women to work or go to school. A) Geography and Natural Resources. B) History and Government. C) Investments in Human Capital. D) Cultural Beliefs and Religion. Show Answer Correct Answer: D) Cultural Beliefs and Religion. 19. Percentage of income paid in taxes remains the same at all income levels. A) Progressive tax. B) Proportional tax. C) Regressive tax. D) Individual income tax. Show Answer Correct Answer: B) Proportional tax. 20. Collective bargaining is the process of unions and government to agree on the terms of employment A) True. B) False. Show Answer Correct Answer: B) False. ← 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