This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Macroeconomics – Quiz 228 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 228 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What factors affect aggregate demand? A) Consumer spending, investment, government spending, and net exports. B) Weather conditions, natural disasters, and political stability. C) Population growth, technological advancements, and income levels. D) Interest rates, inflation, and exchange rates. Show Answer Correct Answer: A) Consumer spending, investment, government spending, and net exports. 2. When the economy is working properly, and at a normal rate of growth, the unemployment rate is usually around: A) 0-2 percent. B) 2-8 percent. C) 4-6 percent. D) 15-20 percent. Show Answer Correct Answer: C) 4-6 percent. 3. Which type of market structures has very few producers(companies) that control the majority of the market? Hint:think of the soda market A) Perfect competition. B) Monopolistic competition. C) Oligopoly. D) Monopoly. Show Answer Correct Answer: C) Oligopoly. 4. The board of seven appointed members who supervise the operations of the Federal Reserve and set policy is called the A) Board of Bankers. B) Board of Governors. C) Board of Regulators. D) Board of Trustees. Show Answer Correct Answer: B) Board of Governors. 5. Which one of the following is the best example of fiat money? A) Gold coins. B) Business stocks. C) A valuable painting. D) Dollar bills. E) Real estate. Show Answer Correct Answer: D) Dollar bills. 6. The slope of the consumption function is A) Equal to the MPC and is equal to 1. B) Equal to the MPC and is less than 1. C) Not equal to the MPC and is less than 1. D) Equal to the MPC and is greater than 1. Show Answer Correct Answer: B) Equal to the MPC and is less than 1. 7. If the government wants to reduce unemployment, government spending should be ..... A) Decrease. B) Increase. C) Constant. D) None of the above. Show Answer Correct Answer: B) Increase. 8. The use by the the government of a high interest rate policy as a counter inflationary device is based on the assumption that one of its effects will be to increase the A) Level of saving. B) Interest repayments on the national debt. C) Level of investment. D) Level of borrowing by private businesses. Show Answer Correct Answer: A) Level of saving. 9. Which of the following is considered as M2 money but not a component of M1 money? A) Term deposits of MNT. B) Foreign currency current account. C) Time deposit of MNT. D) All of the above are considered M2 money and not M1 money. Show Answer Correct Answer: B) Foreign currency current account. 10. Which of the following is included in the computation of gross domestic product? A) Government transfer payments, such as unemployment benefits. B) Purchases of used goods, such as used cars. C) Child care tasks performed by househusbands. D) Total value of business inventories. E) Additions to business inventories. Show Answer Correct Answer: E) Additions to business inventories. 11. Suppose a bank has a 10 percent reserve requirement, RM5, 000 in deposits, andhas loaned out all it can given the reserve requirement. A) It has RM50 in reserves and RM4, 950 in loans. B) It has RM500 in reserves and RM4, 500 in loans. C) It has RM555 in reserves and RM4, 445 in loans. D) None of the above is correct. Show Answer Correct Answer: B) It has RM500 in reserves and RM4, 500 in loans. 12. The leaders of a small country decide that they need to enact a contractionary fiscal policy. Which action is consistent with this fiscal policy? A) Lower its discount rate. B) Reduce government spending. Show Answer Correct Answer: B) Reduce government spending. 13. Governments can choose to increase or decrease taxes and/or money to influence the economy. A) True. B) False. Show Answer Correct Answer: A) True. 14. The value of exports of goods and services minus the value of imports of goods and services. A) Gross Domestic Product. B) Net exports of goods and services. C) Investment. D) Nominal GDP. Show Answer Correct Answer: B) Net exports of goods and services. 15. The Federal Reserve can move the interest rate through open-market operations that shift the money supply curve. In practice, the Fed sets a ..... and uses open-market operations to achieve that target. A) Target Federal Funds Rate. B) Federal Funds Rate. C) Required Federal Funds Rate. D) Adjustable Federal Funds Rate. Show Answer Correct Answer: A) Target Federal Funds Rate. 16. What is Central Bank approach to reduce inflation rate in order to achieve the inflation targeting? A) Central Bank will reduce the money supply when there is positive shock in aggregate demand. B) Increase in money supply when there is positive shock in aggregate supply. C) Reducing the interest rate when there is positive shock in aggregate demand. D) All of the above. Show Answer Correct Answer: A) Central Bank will reduce the money supply when there is positive shock in aggregate demand. 17. Quantity equation A) MV=PY. B) MP=VY. C) MY=PV. D) VP=MY. Show Answer Correct Answer: A) MV=PY. 18. ..... are formed with the idea that there's strength in numbers. A) Strikes. B) Organizations. C) Union leaders. D) Unions. Show Answer Correct Answer: D) Unions. 19. According to the Classical labor market model, a minimum wage above the equilibrium wage will result in ..... A) An increase in unemployment. B) An increase in employment. C) No change in employment. D) An increase in the size of the labor force. E) A decrease in the number of discouraged workers. Show Answer Correct Answer: A) An increase in unemployment. 20. Demand-pull inflation is caused by A) A significant increase in the price of an input with economy-wide importance. B) A significant increase in aggregate demand. C) An increase in the price level. D) None of the above. Show Answer Correct Answer: B) A significant increase in aggregate demand. ← 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