This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Macroeconomics – Quiz 29 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 29 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The idea that economic downturns result from an inadequate aggregate demand for goods and services is derived from the work of which economist? A) Adam Smith. B) David Hume. C) David Ricardo. D) John Maynard Keynes. Show Answer Correct Answer: D) John Maynard Keynes. 2. An increase in the real interest rate increases people's savings. A) True. B) Lie. Show Answer Correct Answer: A) True. 3. The trading or sharing of a hunted wildebeest in a tribal African village, is an example of what type of economic system? A) Market Economy. B) Traditional Economy. C) Command Economy. D) None of the Above. Show Answer Correct Answer: B) Traditional Economy. 4. Personal Income, Medicare, and Social Security are all what type of taxes? A) Federal. B) Local. C) Payroll. D) Progressive. Show Answer Correct Answer: C) Payroll. 5. A microeconomist-as opposed to a macroeconomist-might study A) The effect of borrowing by the federal government on the inflation rate. B) The effect of rising oil prices on employment in the airline industry. C) Changes in the nations unemployment rate over short periods of time. D) Alternative policies to promote higher living standards throughout the nation. E) The relationship between unemployment and inflation. Show Answer Correct Answer: B) The effect of rising oil prices on employment in the airline industry. 6. If a nation currently has a budget deficit, their income is not covering the cost of running their country and cuts may have to occur for public services and social welfare. If this budget is not revised, what could be a possible result of this situation? A) A budget surplus. B) A balanced budget. C) Growing deficits and debt. D) Discretionary fiscal policy. Show Answer Correct Answer: C) Growing deficits and debt. 7. What of the following does NOT enter GDP? A) Public service. B) Public education. C) Life expectancy. D) National defense. Show Answer Correct Answer: C) Life expectancy. 8. Which of the following statements about the simple circular flow model of a market economy is correct? A) Households are on the demand side of the product market and the supply side of the resource market. B) Business firms are on the supply side of both the product market and the resource market. C) Households receive income in the form of wages, and business firms receive income in the form of investment. D) Exports and investment expenditures are examples of leakage from the circular flow, whereas imports and savings are injections. E) Circular flow models are used primarily to explain why money is necessary in any economic system. Show Answer Correct Answer: A) Households are on the demand side of the product market and the supply side of the resource market. 9. The public sector includes: A) Investors owning companies. B) Government ownership of assets. C) Market forces of supply and demand. D) Private enterprise. Show Answer Correct Answer: B) Government ownership of assets. 10. Which of the following is a subject matter of Macroeconomics? A) Studies Employment & Unemployment. B) Determination of National Income. C) Promotes Economic Growth & Development. D) All of the above options. Show Answer Correct Answer: D) All of the above options. 11. When the government spends more money than they take in each year is called a ..... ? A) Debt. B) Deficit. C) Surplus. D) Expansionary. Show Answer Correct Answer: B) Deficit. 12. From the standpoint of economic growth, banks are important to: A) Fight inflation. B) Keep interest rates low. C) Channel savings into investment. D) Channel investment into savings. E) Facilitate the use of checking and savings accounts. Show Answer Correct Answer: C) Channel savings into investment. 13. You will always have this because people will always want to change jobs. A) Frictional unemployment. B) Seasonal unemployment. C) Cyclical unemployment. D) Structural unemployment. Show Answer Correct Answer: A) Frictional unemployment. 14. The advantage of a 30 year mortgage over a 15 year mortgage is that you pay less over the life of a loan A) True. B) False. C) Maybe. D) None of above. Show Answer Correct Answer: B) False. 15. The government is concerned that the high inflation rate is threatening the sustainability of recent economic growth. What is the best way for the government to reduce the inflation rate? A) By decreasing government spending and increasing taxes. B) By increasing government spending and decreasing taxes. C) By decreasing both government spending and taxes. D) By increasing both government spending and taxes. Show Answer Correct Answer: A) By decreasing government spending and increasing taxes. 16. Assume that the nominal interest rate is 10 percent. If the expected inflation rate is 3 percent, the real interest rate is A) 0.5%. B) 3%. C) 7%. D) 10%. Show Answer Correct Answer: C) 7%. 17. Study of Microsoft company profit for the year 2020-21 is an example of? A) Microeconomics. B) Macroeconomics. C) Any of the two-microeconomics or macroeconomics. D) None of these. Show Answer Correct Answer: A) Microeconomics. 18. What is a country's use of quotas and tariffs to promote its own industries over foreign competition called? A) Economic welfare. B) Protectionism. C) Promotions. D) Laizzez-faire. Show Answer Correct Answer: B) Protectionism. 19. What does NAIRU stand for? A) Non-accelerating inflation rate of unemployment,. B) Nasty Awesome Incredible Real Unemployment. C) LRPC. D) SRPC. Show Answer Correct Answer: A) Non-accelerating inflation rate of unemployment,. 20. The law of Supply states that the higher the price the lower the quantity supplied, true or false? A) False. B) True. Show Answer Correct Answer: A) False. ← 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