This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Macroeconomics – Quiz 23 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 23 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. This describes services the government is obligated to provide. Examples include public safety (police, fire), education, parks and recreation, social security, and infrastructure. A) Entitlements. B) Subsidies. C) Tariffs. D) Imports. E) Exports. Show Answer Correct Answer: A) Entitlements. 2. How would a balanced budget amendment affect a decision by Congress to grant a tax cut during a recession? A) It would lead to an automatic tax cut during a recession. B) It would have no impact on Congress' decision to grant a tax cut during a recession. C) It would make it more difficult for Congress to grant a tax cut during a recession. D) It would make it easier for Congress to grant a tax cut during a recession. . Show Answer Correct Answer: C) It would make it more difficult for Congress to grant a tax cut during a recession. 3. Unemployment that relates to the regular ups and downs, or trends in growth and production, that occur within the business cycle A) Frictional Unemployment. B) Cyclical Unemployment. C) Seasonal Unemployment. D) Structural Unemployment. Show Answer Correct Answer: B) Cyclical Unemployment. 4. Which of the following occurs as the economy moves leftward along a given IS curve? A) An increase in the interest rate causes investment spending to decrease. B) An increase in the interest rate causes money demand to increase. C) An increase in the interest rate causes a reduction in the money supply. D) A reduction in government spending causes a reduction in demand for goods. Show Answer Correct Answer: A) An increase in the interest rate causes investment spending to decrease. 5. The United States National Debt is best explained as the ..... A) Amount of money owed by the federal government to US citizens. B) Amount of US currency in the hands of foreigners. C) Amount of money owed by the state and local governments to US citizens. D) Amount of money owed to holders of US government securities (treasury bonds). Show Answer Correct Answer: D) Amount of money owed to holders of US government securities (treasury bonds). 6. Gross domestic product includes: A) All goods and services. B) Newly produced foreign goods as well as used goods. C) Used goods sold in the current time period. D) Only the values of final goods and services. Show Answer Correct Answer: D) Only the values of final goods and services. 7. A woman who lost her job due to a decrease in sales during a recession in the economy is ..... A) Frictionally unemployed. B) Structurally unemployed. C) Cyclically unemployed. D) Seasonally unemployed. Show Answer Correct Answer: C) Cyclically unemployed. 8. The production possibilities frontier is a graph that shows a various combinations of output that an economy A) Should produce. B) Wants to produce. C) Can produce. D) Demands. E) Supplies. Show Answer Correct Answer: C) Can produce. 9. When government policies are being designed: A) There is usually a tradeoff between equity and efficiency. B) Equity and efficiency goals are usually independent of each other. C) Equity can usually be achieved without an efficiency loss. D) Increasing efficiency usually results in more equity. Show Answer Correct Answer: A) There is usually a tradeoff between equity and efficiency. 10. If a governmental policy decreases AD, then in the short run demand will ..... A) Decrease and unemployment will rises. B) Stay the same and unemployment will fall. C) Decrease and unemployment will stay the same. D) Decrease and unemployment will decrease. Show Answer Correct Answer: A) Decrease and unemployment will rises. 11. Why do economists want slight amounts of inflation to happen very predictably? A) Unexpected inflation is bad. B) Consumers and firms can plan for the future. C) Consumers and firms are rather unpredictable. D) Deflation is bad. Show Answer Correct Answer: B) Consumers and firms can plan for the future. 12. Which kind of monetary policy would you expect in response to high inflation:expansionary or contractionary? A) Expansionary. B) Contractionary. Show Answer Correct Answer: B) Contractionary. 13. In the short run if the price of imported Brazilian lumber used in buildings increases ..... A) AS shifts left. B) AS shifts right. C) AD shifts left. D) AD shifts right. Show Answer Correct Answer: A) AS shifts left. 14. The federal requirement to keep a certain percentage of money at the bank is know as the ..... A) Reserve requirement (rate, ratio). B) Discount rate. C) Mutual fund. D) Prime (interest ) rate. Show Answer Correct Answer: A) Reserve requirement (rate, ratio). 15. Money that can be directly use for transactions is A) M1. B) M2. C) Near money. D) Broad money. Show Answer Correct Answer: A) M1. 16. Imagine a scenario where a country's economy is booming, industries are flourishing, and there is a surge in job opportunities. This is followed by a sudden downturn, industries start to collapse, and unemployment rises. What is this phenomenon called? A) Business Cycle. B) Circular Flow. C) Equilibrium. D) GDP. Show Answer Correct Answer: A) Business Cycle. 17. An increase in the money supply will A) Reduce interest rates and increase aggregate demand. B) Reduce interest rates and decrease aggregate demand. C) Raise interest rates and increase aggregate demand. D) Raise interest rates and decrease aggregate demand. Show Answer Correct Answer: A) Reduce interest rates and increase aggregate demand. 18. Model A) The claim that, other things equal, the quantity supplied of a good rises when the price of the good rises. B) "money wage" = money you're paid by an employer for your labor. not adjusted for inflation. C) A simplified representation that is used to study a real situation is called:. D) Normal Good = good for which higher income increases demandExamples Ipods, TV, anything considered nice or of good qualityInferior Good = good for which higher income decreases demandExamples:generic brands, 2nd hand goods, anything considered cheap or of lowerquality. Show Answer Correct Answer: A) The claim that, other things equal, the quantity supplied of a good rises when the price of the good rises. 19. Which of the following measure of welfare focuses on people and their capabilities to access the development and welfare of a country? A) Social Progress Index. B) Gross Domestic Product. C) Human Development Index. D) Gross National Happiness Index. Show Answer Correct Answer: C) Human Development Index. 20. Increase in the stock of capital is known as: A) Capital loss. B) Capital gain. C) Capital formation. D) Both b and c. Show Answer Correct Answer: C) Capital formation. ← 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