This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Macroeconomics – Quiz 56 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 56 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is not a barrier to the effectiveness of fiscal policy? A) Political constraints. B) Supply-side shocks. C) Economic recession. D) Progressive tax systems. Show Answer Correct Answer: D) Progressive tax systems. 2. The US government is worried that unemployment is increasing because the money supply is too low. How might monetary policy be used to increase the money supply? A) The Federal Reserve could purchase government bonds. B) The Federal Reserve could sell government bonds. C) The Federal Reserve could raise the discount rate. D) The Federal Reserve could lower the discount rate. Show Answer Correct Answer: A) The Federal Reserve could purchase government bonds. 3. If the Federal Reserve lowers reserve requirements, which of the following is most likely to happen to interest rates and nominal gross domestic product? A) Increase and Decrease. B) Increase and Increase. C) Decrease and Decrease. D) Decrease and Increase. E) No change and No change. Show Answer Correct Answer: E) No change and No change. 4. Which of the following would be most likely to cause a decrease in the natural rate of unemployment? A) An economic book leads to a temporary increase in output. B) More people opt for an early retirement. C) A recession causes widespread layoffs. D) Public policies such as unemployment insurance are introduced. Show Answer Correct Answer: B) More people opt for an early retirement. 5. Percentage of deposits that the Fed requires banks to hold back and not lend out A) Fed Fund Rate. B) Reserve Requirement Rate. C) Discount Rate. D) I.O.U Rate. Show Answer Correct Answer: B) Reserve Requirement Rate. 6. The time it takes for active fiscal policies to show up in changes in tax forms and government budgets is referred to as ..... A) A data lag. B) An outside lag. C) A transmission lag. D) A legislative lag. E) A recognition lag. Show Answer Correct Answer: C) A transmission lag. 7. Which BEST describes an economy that is in a trough of the business cycle? A) Unemployment is low, real GDP is high, and inflation is high. B) Unemployment is low, real GDP is high, and inflation is low. C) Unemployment is high, real GDP is low, and inflation is low. D) Unemployment is high, real GDP is high, and inflation is low. Show Answer Correct Answer: C) Unemployment is high, real GDP is low, and inflation is low. 8. All of the following are points on the business cycle EXCEPT A) Peak. B) Expansion. C) Trough. D) GDP. Show Answer Correct Answer: D) GDP. 9. What is monopolisitc competition? A) One company selling identical products under different names. B) Many companies selling similar but not identical products. C) A very few companies selling identical products. D) One company selling different products under different names. Show Answer Correct Answer: B) Many companies selling similar but not identical products. 10. Which government economic policy response will have a different impact on the rate of economic growth than the other three? A) An increase in the target cash rate from 1.5% to 2% by the Reserve Bank of Australia. B) A decrease in welfare payments to the unemployed. C) A decrease in government infrastructure projects. D) A decrease in the rate of income tax. Show Answer Correct Answer: D) A decrease in the rate of income tax. 11. The interest rate is analogous to the population, the future value of money is analogous to the population in the t-th year and the present value of money is analogous to the population in the 0th year. These are concepts..... A) Economic value of time. B) Time value of money. Show Answer Correct Answer: B) Time value of money. 12. The part of the Business Cycle where inflation starts to fall is: A) Recovery. B) Recession. C) Boom. D) Peak. Show Answer Correct Answer: B) Recession. 13. An airline buying a plane belong in which part of the GDP formula? GDP = C+I+G+(X-M) A) Consumption Expenditures. B) Investment Expenditures. C) Government Expenditures. D) Net Imports. Show Answer Correct Answer: B) Investment Expenditures. 14. Assume the following numbers for a country:Personal Consumption-$ 100 Investment-$ 50 Government Spending-$ 50 Exports-$ 100 Imports-$ 150What is the total GDP for this country? A) 150. B) 450. C) 300. D) 200. Show Answer Correct Answer: A) 150. 15. If an economy is experiencing high unemployment and low inflation, what type of fiscal policy might the government implement? A) Expansionary fiscal policy. B) Contractionary fiscal policy. C) Neutral fiscal policy. D) Monetary policy. Show Answer Correct Answer: A) Expansionary fiscal policy. 16. Goods purchased for Satisfaction of Wants are? A) Capital Goods. B) Final Goods. C) Consumption Goods. D) Intermediate Goods. Show Answer Correct Answer: C) Consumption Goods. 17. Inflation that occurs when a country experiences very high and usually accelerating rates of inflation, rapidly eroding the real value of the local currency, and causing the population to minimize their holdings of local money. A) Cost-push inflation. B) Hyperinflation. C) Demand-pull inflation. D) Deflation. Show Answer Correct Answer: B) Hyperinflation. 18. Which of the following changes would cause an economy's aggregate demand curve to shift to the right? A) An increase in spending on imports. B) An increase in autonomous consumption spending. C) An increase in interest rates. D) A decrease in the money supply. E) A decrease in the overall price level in the economy. Show Answer Correct Answer: B) An increase in autonomous consumption spending. 19. If there is an increase in the price of DVD players what will happen to the supply curve? A) It will shift to the left. B) No change. C) It will shift to the right. D) We can not determine. Show Answer Correct Answer: B) No change. 20. To counteract a recession, the Federal Reserve should A) Raise the reserve requirement and the discount rate. B) Sell securities on the open market and raise the discount rate. C) Sell securities on the open market and lower the discount rate. D) Buy securities on the open market and raise the discount rate. E) Buy securities on the open market and lower the discount rate. Show Answer Correct Answer: E) Buy securities on the open market and lower the discount rate. ← 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