This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Macroeconomics – Quiz 67 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 67 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The Consumer Price Index (CPI) can be defined as A) The market value of all final goods and services. B) A measure of inflation based on the cost of a fixed "market basket". Show Answer Correct Answer: B) A measure of inflation based on the cost of a fixed "market basket". 2. The economy hits a recession and your employer has fired you. This is an example of ..... A) Cyclical unemployment. B) Structural unemployment. C) Seasonal unemployment. D) Frictional unemployment. Show Answer Correct Answer: A) Cyclical unemployment. 3. The ..... is the channel through which the Federal Reserve lends money to banks. A) Discount Window. B) Borrow Window. C) Lending Window. D) Reserve Window. Show Answer Correct Answer: A) Discount Window. 4. What is not a negative consequence to Price Ceilings? A) Equilibrium Price. B) Inefficient Allocation to Consumers. C) Black Markets. D) Inefficiently Low Quality. Show Answer Correct Answer: A) Equilibrium Price. 5. At the existing price, quantity supplied exceeds the quantity demanded, also called a surplus A) Excess supply. B) Surplus. C) Excess demand. D) Shortage. Show Answer Correct Answer: A) Excess supply. 6. The total number of units of a good or service consumers/buyers are willing to sell a a given price A) Demand curve. B) Quantity demanded. C) Quantity supplied. D) Supply curve. Show Answer Correct Answer: B) Quantity demanded. 7. The investment demand curve will shift to the right as the result of A) An increase in corporate business taxes. B) A decrease in the real interest rate. C) Recessions in foreign nations that trade with the United States, causing a lower demand for U.S. products. D) An increase in the nominal interest rate. Show Answer Correct Answer: B) A decrease in the real interest rate. 8. How much the economy can produce at its natural rate of output depends on A) Technology. B) The quantity of available natural resources. C) The productivity of labor. D) The stock of available capital. E) All of the above. Show Answer Correct Answer: E) All of the above. 9. A system in which society, usually in the form of the government, owns and controls the means of production A) Capitalism. B) Free market. C) Socialism. D) Communism. Show Answer Correct Answer: C) Socialism. 10. The ability to pay tax principle says that A) People who can afford to pay taxes should pay more than those with limited ability to pay. B) People who use certain public goods and services should pay for them with taxes. C) The proportion of income paid in taxes decreases as income decreases. D) The proportion of income paid in taxes increases as income increases. Show Answer Correct Answer: A) People who can afford to pay taxes should pay more than those with limited ability to pay. 11. If purchases of education and medical care were counted as investment rather than consumption, gross domesticproduct would A) Not change, because there is no change in total expenditures. B) Increase, because investment is included in gross domestic product but consumption is not. C) Increase, because consumption is included in gross domestic product but investment is not. D) Decrease, because investment is weighted more heavily than consumption in calculating gross domestic product. E) Decrease, because consumption is weighted more heavily than investment in calculating gross domestic product. Show Answer Correct Answer: A) Not change, because there is no change in total expenditures. 12. Measure based on the overall cost of a fixed basket of goods and services bought by a typical consumer and it is also used to show inflation/deflation. A) Gross Domestic Product GDP. B) Gross National Product GNP. C) Consumer Price Index CPI. D) Social Progress Index SPI. Show Answer Correct Answer: C) Consumer Price Index CPI. 13. If the Federal Reserve is using a contractionary monetary policy or where it is trying to decrease the money supply, it would do all of the following but ..... A) Decrease interest payments on reserves. B) Increase discount rate. C) Sell bonds in the open market. D) Increase reserve requirement. Show Answer Correct Answer: A) Decrease interest payments on reserves. 14. Changes in technology and changes in consumer tastes can cause A) Frictional unemployment. B) Structural unemployment. C) Cyclical unemployment. D) Seasonal unemployment. Show Answer Correct Answer: B) Structural unemployment. 15. The aggregate demand curve (AD) shows which of the following relationships? A) Higher rates of inflation are associated with lower levels of output. B) Lower rates of inflation are associated with lower levels of output. C) Higher rates of inflation are associated with higher interest rates. D) Lower rates of inflation are associated with higher interest rates. E) Higher rates of interest are associated with lower levels of output. Show Answer Correct Answer: A) Higher rates of inflation are associated with lower levels of output. 16. Justinia is a country that produces three goods:guitars, physics books, and sandals.Which of the following would definitely cause an increase in nominal GDP but not a change real GDP in Justinia? A) The quantity of goods produced increases; prices stay the same. B) The quantity of goods produced increases; prices decrease. C) The quantity of goods produced increases; prices increase. D) The quantity of goods produced decreases; prices stay the same. E) The quantity of goods produced stays the same; prices increase. Show Answer Correct Answer: E) The quantity of goods produced stays the same; prices increase. 17. A general rule of thumb says that a country has experienced a recession if: A) Real GDP has declined. B) GDP has declined. C) Nominal GDP has declined for at least two consecutive quarters. D) Real GDP has declined for at least two consecutive quarters. Show Answer Correct Answer: D) Real GDP has declined for at least two consecutive quarters. 18. Type of unemployment that occurs as a result of harvest schedules, vacations, or when industries make seasonal shifts in their production schedules. A) Seasonal Unemployment. B) Structural Unemployment. C) Frictional Uneployment. D) Cyclical Unmeployment. Show Answer Correct Answer: A) Seasonal Unemployment. 19. The U.S. economy is driven by A) Consumer spending. B) Governmental spending. C) Personal savings. D) Federal taxes. Show Answer Correct Answer: A) Consumer spending. 20. College-age athletes who drop out of college to play professional sports: A) Are not rational decision makers. B) Are well aware that their opportunity cost of attending college is very high. C) Are concerned more about present circumstances than their future. D) Underestimate the value of a college education. Show Answer Correct Answer: B) Are well aware that their opportunity cost of attending college is very high. ← 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