This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Macroeconomics – Quiz 246 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 246 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. North Face is a popular U.S. brand of adventure equipment, clothing, and accessories. Most of its apparel is produced in China. In which category would the value of these items appear? A) US GDP. B) China's GDP. C) U.S GNP. D) In both U.S. GNP and China GDP. Show Answer Correct Answer: D) In both U.S. GNP and China GDP. 2. Which of the following policy choices represents a combination of fiscal and monetary policies designed to bring the economy out of a recession? A) Decreasing both taxes and money supply. B) Increasing both taxes and the money supply. C) Increasing government spending and decreasing the federal funds rate. D) Increasing both taxes and discount rate. Show Answer Correct Answer: C) Increasing government spending and decreasing the federal funds rate. 3. The study of how the entire economy work is what? A) Macroeconomics. B) Microeconomics. C) None of the above. D) All of the above. Show Answer Correct Answer: A) Macroeconomics. 4. Which of the following are included in the unemployment rate? A) Adults who have retired. B) Part-time workers seeking full-time jobs. C) Laid-off workers seeking new employment. D) Workers who have given up seeking a new job. Show Answer Correct Answer: C) Laid-off workers seeking new employment. 5. What is absolute advantage? A) When a company lowers their prices. B) When a company can make more stuff than competitors using the same amount of resources. C) When a company raises their prices. D) A government tax. Show Answer Correct Answer: B) When a company can make more stuff than competitors using the same amount of resources. 6. Which of the following would be included in ( i.e., add to) US GDP? A) All of the above. B) The value of cars produced by General Motors in its Mexico City Plant and purchased by a person by Detroit, Michigan. C) A government expenditure on transfer payments such as social security benefits received by Granny. D) Purchases by local government in police cars built by Hyundai in its Montgomery, Alabama plant. Show Answer Correct Answer: D) Purchases by local government in police cars built by Hyundai in its Montgomery, Alabama plant. 7. How would an increase in consumer spending affect aggregate demand? A) AD would shift to the left. B) AD would not change. C) AD would shift to the right. D) AD would decrease. Show Answer Correct Answer: C) AD would shift to the right. 8. Why are entrepreneurs called "risk takers" ? A) Because they combine productive resources to start a new business. B) Because they invest time or money that may or may not come back. C) Because they will be successful in their business no matter what happens. D) Because they are charged more taxes than other people that own their own business. Show Answer Correct Answer: B) Because they invest time or money that may or may not come back. 9. Aggregate demand may be measured by adding A) Consumption, investment, savings, and imports. B) Savings, government spending, and business inventories. C) Consumption, investment, government spending, and net exports. D) Domestic private expenditures and government spending. E) Domestic expenditures and imports. Show Answer Correct Answer: C) Consumption, investment, government spending, and net exports. 10. Expansionary fiscal policy will be most effective in increasing real gross domestic product when A) The aggregate supply curve is horizontal. B) The economy is at or above full-employment output. C) Transfer payments are decreased, while taxes remain unchanged. D) Wages and prices are very flexible. E) The Federal Reserve simultaneously increases the reserve requirement. Show Answer Correct Answer: A) The aggregate supply curve is horizontal. 11. This type of money is valuable because it is made of something valuable. A) Commodity money. B) Representative money. C) Fiat money. D) None of above. Show Answer Correct Answer: A) Commodity money. 12. Which market represents the buying and selling of factors of production? A) Factor Market. B) Product Market. C) Labor Market. D) Capital Market. Show Answer Correct Answer: A) Factor Market. 13. Macroeconomic behavior is the sum of all the microeconomic decisions made by individual households and firms. A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 14. A higher GDP generally correlates to a(n) ..... standard of living. A) Higher. B) Lower. C) Unrelated. D) None of above. Show Answer Correct Answer: A) Higher. 15. The process by which banks increase the money supply is known as money creation. The amount by which the money supply can increase depends on their liquidity ratio. If the bank decides to hold a lower liquidity ratiom the bank multiplier will ..... A) Increase. B) Reduce. C) Stay the same. D) None of above. Show Answer Correct Answer: A) Increase. 16. When people pay the same percentage regardless of income it is A) A progressive tax. B) A proportional tax. C) A regressive tax. D) None of above. Show Answer Correct Answer: B) A proportional tax. 17. Which of the following is NOT an example of a currency? A) KardashianKoin. B) Euro. C) Japanese Yen. D) Mexican Peso. Show Answer Correct Answer: A) KardashianKoin. 18. According to the classical dichotomy, when the money supply doubles, everything doubles? A) Nominal GDP. B) Nominal salary. C) The value. D) All of the above are true. Show Answer Correct Answer: D) All of the above are true. 19. According to the quantity theory of money, which variable in the quantity equation is most stable over long periods of time? A) Money. B) Velocity. C) Price level. D) Output. Show Answer Correct Answer: B) Velocity. 20. Which of the following would be considered expansionary? A) Government spending increased & taxes decreased. B) Government spending increased & taxes increased. C) Government spending decreased & taxes decreased. D) Government spending decreased & taxes increased. Show Answer Correct Answer: A) Government spending increased & taxes decreased. ← 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