This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Macroeconomics – Quiz 37 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 37 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The majority of the Federal Budget is what type of spending? A) Discretionary. B) Mandatory. C) Presidential. D) Congressional. Show Answer Correct Answer: B) Mandatory. 2. The component of overall unemployment that results directly from cycles of economic upturn and downturn (inflation/ unstable markets) A) Cyclical unemployment. B) Frictional unemployment. C) Structural unemployment. D) Seasonal unemployment. Show Answer Correct Answer: A) Cyclical unemployment. 3. The downward slope of a demand curve A) Represents the law of demand. B) Shows that as the price of a good rises, consumers increase the quantity they demand. C) Indicates how the quantity demanded changes when incomes rise and the good is a normal good. D) Indicates how demand changes when incomes rise and the good is a normal good. Show Answer Correct Answer: A) Represents the law of demand. 4. True or False.The 12-year-old Lisa works with her parent's supervision is considered as part of the labor force. A) True. B) False. Show Answer Correct Answer: B) False. 5. If an economy always has inflation of 10 percent per year, which of the following costs of inflation will it NOT suffer? A) Shoeleather costs from reduced holdings of money. B) Menu costs from more frequent price adjustment. C) Distortions from the taxation of nominal capital gains. D) Arbitrary redistributions between debtors and creditors. Show Answer Correct Answer: D) Arbitrary redistributions between debtors and creditors. 6. If the federal government is attempting to encourage spending by consumers and businesses, a fiscal policy BEST serving this purpose would be A) Reducing the investment tax credit. B) Decreasing government spending. C) Decreasing taxes. D) Balancing the budget. Show Answer Correct Answer: C) Decreasing taxes. 7. For an aggregate supply and demand graph, the Y-Axis (vertical) should be labeled which way? A) Price. B) Real GDP. C) Price level. D) Quantity. Show Answer Correct Answer: C) Price level. 8. Printing money and distributing it to all people is not a viable solution to heal world-wide poverty because ..... A) It would result in unemployment. B) We cannot afford to print that much money. C) Money will be spent on imported goods. D) It would result in inflation. Show Answer Correct Answer: D) It would result in inflation. 9. What do we call the most famous measure of how consumers feel about the economy? A) Consumer Sentiment Index. B) Consumer Price Index. C) Consumer Confidence Index. D) Consumers Purchasing Power Index. E) Consumer Parity Index. Show Answer Correct Answer: C) Consumer Confidence Index. 10. The action by the Central Bank to adjust the size of the money supply, and to adjust interest rates in order to keep prices down and employment high refers to A) Fiscal policy. B) Monetary policy. Show Answer Correct Answer: B) Monetary policy. 11. Amount of money originally borrowed A) Mortgage. B) Principal. C) Annual percentage rate (APR). D) Finance company. Show Answer Correct Answer: B) Principal. 12. Fiscal spending can increase the overall stimulus in the economy if the same funds are spent by several people. This is called the ..... effect. A) Supply side. B) Keynsian economics. C) Implementation lag. D) Multiplier. Show Answer Correct Answer: D) Multiplier. 13. ..... us an economic model illustrating the flow of goods & services among economic agents. A) Circular flow diagram. B) Diagram of a circular ecnomy. C) Economic circular diagram. D) Simple economic diagram. E) CFD of a Macroeconomy. Show Answer Correct Answer: A) Circular flow diagram. 14. The concept that people may decide what and when they want to buy and sell goods & services A) Voluntary exchange. B) Legal equality. C) Private property. D) Open opportunity. Show Answer Correct Answer: A) Voluntary exchange. 15. Suppose the economy is initially in long-run equilibrium. Then suppose there is a drought that destroys much of the wheat crop. According to the model of aggregate demand and aggregate supply, what happens to prices and output in the short run? A) Prices rise; output falls. B) Prices fall; output rises. C) Prices rise; output rises. D) Prices fall; output falls. Show Answer Correct Answer: A) Prices rise; output falls. 16. If the government increases taxes on consumers, AD will? A) Decrease. B) Increase. C) Remain unchanged. D) Stays the same. Show Answer Correct Answer: A) Decrease. 17. Unemployment generally ..... during recessions and ..... during expansions. A) Falls; rises. B) Falls; falls. C) Rises; falls. D) Rises; rises. Show Answer Correct Answer: C) Rises; falls. 18. Suppose real GDP increases. We can conclude without double that A) Prices are higher. B) Employment is higher. C) Production is higher. D) Prices and output are greater. E) Unemployment is lower. Show Answer Correct Answer: C) Production is higher. 19. When the central bank increases the money supply rapidly it will lead to A) Deflation. B) No effect. C) Inflation. D) Demands for goods and services. Show Answer Correct Answer: C) Inflation. 20. Which of the following statements is true regarding joint ventures: A) Joint-venture arrangements are usually short-term relationships. B) Joint ventures are used only when it is necessary to raise a lot of capital. C) Large corporations are the only business structures that can benefit from joint ventures. D) An independent attorney must always be consulted before signing a joint-venture agreement. Show Answer Correct Answer: A) Joint-venture arrangements are usually short-term relationships. ← 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