This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Macroeconomics – Quiz 242 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 242 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. ..... are the key players in the monetary system A) People. B) Governments. C) Businesses. D) Banks. Show Answer Correct Answer: D) Banks. 2. Which of the following would indicate that economic growth has occurred? A) The production possibilities curve shifts to the left. B) The long run aggregate supply curve shift to the right. C) The aggregate demand curve shift to the right. D) The Phillips curve becomes flatter. Show Answer Correct Answer: B) The long run aggregate supply curve shift to the right. 3. Permanent income is..... A) Unexpected addition or reduction in income. B) Increase or decrease when there is an increase/decrease obtained from temporary income. C) None of it is true. D) Income that is always received in a certain period. E) All wrong. Show Answer Correct Answer: D) Income that is always received in a certain period. 4. Which function of money encourages people to save money? A) Medium of Exchange. B) Store of Value. C) Unit of Account. D) Acceptability. Show Answer Correct Answer: B) Store of Value. 5. Under what conditions is a wage-price spiral most likely to occur? A) When the AD curve shifts upwards. B) When the AD curve shifts downwards. C) When the economy is in a recession. D) When the economy is at full employment. E) When the economy is near the maximum capacity output. Show Answer Correct Answer: E) When the economy is near the maximum capacity output. 6. What is Economic Growth? A) Increase in government spending. B) Increase in the production of goods and services in an economy over time. C) Decrease in consumer spending. D) Decrease in exports. Show Answer Correct Answer: B) Increase in the production of goods and services in an economy over time. 7. When a nation totally bans trade with another country, it is imposing: A) Free trade. B) An embargo. C) A quota. D) A tariff. Show Answer Correct Answer: B) An embargo. 8. All countries need all other countries for trade is called ..... A) Favorable Balance of Trade. B) Unfavorable Balance of Trade. C) Interdependence. D) Comparative Advantage. Show Answer Correct Answer: C) Interdependence. 9. Which economic indicator would be used to keep track of inflation by tracking changes in the prices of goods and services typically purchased by consumers? A) Stock market. B) Consumer price index. Show Answer Correct Answer: B) Consumer price index. 10. What is the key difference between GDP and GNP? A) GDP measures an economy, GNP measures poverty. B) GDP measures domestic production, GNP measures production domestically & abroad. C) GDP is only used by the U.S., GNP is used by most countries. D) GDP includes only goods, GNP includes both goods & services. Show Answer Correct Answer: B) GDP measures domestic production, GNP measures production domestically & abroad. 11. Which of the following causes a shift in the long run Philips curve? A) Any changes to aggregate supply. B) Any changes to aggregate demand. C) Any changes in frictional or structural unemployment. D) All of the above. Show Answer Correct Answer: C) Any changes in frictional or structural unemployment. 12. If the central bank in the preceding question instead holds the money supply constant and allows the interest rate to adjust, the change in aggregate demand resulting from the increase in government purchases will be A) Larger. B) The same. C) Smaller but still positive. D) Negative. Show Answer Correct Answer: C) Smaller but still positive. 13. Using the product approach, which one of the following economic agents is the largest contributor to the gross domestic product of the Euro Area? A) Businesses. B) Non-profit institutions. C) The rest of the world sector. D) Private households. E) Member countries' governments. Show Answer Correct Answer: A) Businesses. 14. Suppose a firm that makes appliances merges with a company that makes clothes, and later it buys a slaughter house. What is this combination called? A) Franchise. B) Horizontal merger. C) Conglomerate. D) Cooperative. Show Answer Correct Answer: C) Conglomerate. 15. ..... refers to the difference between exports and imports of visible items. A) BOP. B) BOT. C) Both. D) NONE. Show Answer Correct Answer: B) BOT. 16. What will be the meaning of, if MPC = 0.75? A) 75% of increased income is spent on consumption. B) 0.75 % of increased income is spent on consumption. C) 75% of income is spent on consumption. D) 0.75% of income is spent on consumption. Show Answer Correct Answer: A) 75% of increased income is spent on consumption. 17. Inflation decreases what in an economy? A) Unemployment. B) The purchasing power of a dollar. C) Interest rates. D) Prices of goods and services. Show Answer Correct Answer: B) The purchasing power of a dollar. 18. Which type of economists believe that the economy is self correcting and does not need government intervention? A) Keynesian economists (Keynes). B) Monetarist economists. C) Supply-side economists. D) Classical economists (Hayek). Show Answer Correct Answer: D) Classical economists (Hayek). 19. NIT=?IF INDIRECT TAX=0SUBSIDIES=200 A) 100. B) -100. C) 200. D) -200. Show Answer Correct Answer: D) -200. 20. Open market operations (OMO) A) Purchase or sale of U.S. government bonds and treasury bills. B) The percent of deposits that banks have to have set aside in cash at any given time. C) An institution that lends money to other banks; also where government does its banking business. D) Federal spending required by law that continues each year without the need for congressional approval. Show Answer Correct Answer: A) Purchase or sale of U.S. government bonds and treasury bills. ← 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