This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Macroeconomics – Quiz 259 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 259 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is the best measure of a nation's standard of living? A) Real GDP per capita. B) Nominal GDP. C) Unemployment. D) Inflation. Show Answer Correct Answer: A) Real GDP per capita. 2. The Fed can ..... interest rates to help stop inflation A) Even out. B) Raise. C) Decrease. D) Both increase and decrease. Show Answer Correct Answer: B) Raise. 3. Mandatory spending A) Federal spending required by law that continues each year without the need for congressional approval. B) Spending for federal programs that must receive approval each year. C) Total market value of all final, new goods and services produced in a country during a single year. D) Material well-being of an individual, measured by how well their needs and wants are satisfied. Show Answer Correct Answer: A) Federal spending required by law that continues each year without the need for congressional approval. 4. If the government collects more in tax revenue than it spends, and households consume more than they get in after-tax income, then ..... A) Private saving is negative, but public saving is positive. B) Private saving and public saving are both negative. C) Private saving is positive, but public saving is negative. D) Private saving and public saving are both positive. Show Answer Correct Answer: A) Private saving is negative, but public saving is positive. 5. Which famous economist came up with fiscal policy theory? A) Adam Smith. B) Karl Marx. C) John Maynard Keynes. D) Milton Friedman. Show Answer Correct Answer: C) John Maynard Keynes. 6. Suppose, the velocity of money is constant, the money supply increases by 6% and GDP grows by 2%. What is the predicted level of inflation? A) 2%. B) 4%. C) 6%. D) 8%. Show Answer Correct Answer: B) 4%. 7. The total amount of money that a country's government has borrowed, by various means A) National Debt. B) Social Security. C) Grants. D) Stock options. Show Answer Correct Answer: A) National Debt. 8. What should be a future effect upon the economy if a expansionary fiscal policy continues in an economy with an increasing budget deficit and growing national debt? A) High inflation. B) Low inflation. Show Answer Correct Answer: A) High inflation. 9. Tighter fiscal policies lead to A) An inwards shift of the AD. B) An outwards shift of the AD. C) An outwards shift of the AS. D) An outwards shift of the AS. Show Answer Correct Answer: A) An inwards shift of the AD. 10. During which phase of the business cycle is production the lowest and unemployment the highest? A) Peak. B) Trough. C) Expansion. D) Contraction. Show Answer Correct Answer: B) Trough. 11. During a contraction / recession, the Federal Government should use A) An expansionary fiscal policy. B) A contractionary fiscal policy. Show Answer Correct Answer: A) An expansionary fiscal policy. 12. Goods can be classified on the basis of A) Consumption of goods. B) Production of gooda. C) 1st use of goods. D) End use of goods. Show Answer Correct Answer: D) End use of goods. 13. Suppose that people lower their expectations about inflation in an economy in a recession. At the same time, the government undertakes expansionary fiscal policy. Based on the AD/AS model, what would we expect to be the result of these two changes? A) Output will increase but inflation could go up or down. B) Output will increase but inflation will go down. C) Output will increase but inflation will go up. D) Output could go up or down but inflation will decrease. E) Output could go up or down but inflation will increase. Show Answer Correct Answer: A) Output will increase but inflation could go up or down. 14. Tanks and roads belong in which part of the GDP formula?GDP = C+I+G+(X-M) A) Consumption Expenditures (Consumer Spending). B) Investment Expenditures (Business Spending). C) Government Expenditures (Gov't Spending). D) Net Imports (Imports-Exports). Show Answer Correct Answer: C) Government Expenditures (Gov't Spending). 15. In a small open economy with a floating exchange rate, if the government increases the money supply, then in the new short-run equilibrium the: A) Interest rate falls and the level of investment rises. B) Exchange rate falls and net exports increase. C) Interest rate falls but the level of investment does not rise. D) Exchange rate falls but net exports do not increase. Show Answer Correct Answer: B) Exchange rate falls and net exports increase. 16. What is an entrepreneur? A) A person who starts a new business. B) A leader of a country. C) A worker in a factory. D) A student in college. Show Answer Correct Answer: A) A person who starts a new business. 17. During recessions all of the following usually happen EXCEPT A) Inflation decreases. B) Unemployment increases. C) GDP decreases. D) GDP increases. Show Answer Correct Answer: D) GDP increases. 18. You borrow $ 200 from the First Bank of Westeros to purchase Kraken repellant. The bank charges a fixed nominal interest rate of 18% per year and you will repay them in one year. You and the bank both anticipate that there will be 7% inflation. However, after the loan agreement is signed, the rate of inflation turns out to be 9%.Who is hurt by this unanticipated inflation, and why are they hurt by it? A) The bank is hurt because the value of what is repaid has decreased. B) You are hurt because the value of what is repaid has decreased. C) The bank is hurt because the value of what is repaid has increased. D) You are hurt because the value of what is repaid has increased. E) We cannot tell without more information. Show Answer Correct Answer: A) The bank is hurt because the value of what is repaid has decreased. 19. Goods and services sent to another country for sale A) Import. B) Export. C) Goods. D) Services. Show Answer Correct Answer: B) Export. 20. A system in which the basic monetary unit is Gold A) Gold Standard. B) Gold Money System. C) Fiat Monetary System. D) Gold Monetary System. Show Answer Correct Answer: A) Gold Standard. ← 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