This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Macroeconomics – Quiz 85 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 85 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following best describes a subsidy? A) Taxes on a consumer to discourage an activity. B) Money taken from consumers to encourage an activity. C) Money given to a business to encourage an activity. D) No money changes hands. Show Answer Correct Answer: C) Money given to a business to encourage an activity. 2. Which of the following is not one of macroeconomics goal? A) TRADE CYCLE. B) FULL EMPLOYMENT. C) PRICE STABILITY. D) ECONOMIC GROWTH. Show Answer Correct Answer: A) TRADE CYCLE. 3. Specialization A) Material well-being of an individual, measured by how well their needs and wants are satisfied. B) When people, businesses, regions, nations, etc. concentrate on goods and/or services they can produce better than others. C) GDP on a per-person basis; GDP divided by population. D) Federal spending required by law that continues each year without the need for congressional approval. Show Answer Correct Answer: B) When people, businesses, regions, nations, etc. concentrate on goods and/or services they can produce better than others. 4. Suppose there is a fiscal contraction. Which of the following is a complete list of the variables that must decrease? A) Consumption and investment. B) Consumption and output. C) Consumption, output and the interest rate. D) Consumption, output and investment. Show Answer Correct Answer: D) Consumption, output and investment. 5. What would be the effect of increasing the banks' reserve requirements on the money supply? A) The effect of increasing the banks' reserve requirements on the money supply would be a decrease. B) The money supply would remain constant. C) There would be no effect on the money supply. D) The effect would be an increase in the money supply. Show Answer Correct Answer: A) The effect of increasing the banks' reserve requirements on the money supply would be a decrease. 6. The expansion or contraction of the money supply in order to influence the cost and the availability of credit is A) Monetary Policy. B) Fiscal Policy. C) Contractionary Policy. D) Expansionary Policy. Show Answer Correct Answer: A) Monetary Policy. 7. The price of paper is rising and at the same time fewer people are reading paper books. In the market for books, what will happen to price and quantity? A) The change in price is unknown, but quantity will increase. B) Price will rise and quantity will fall. C) The change in price is unknown, but quantity will decrease. D) Price will fall and quantity will rise. Show Answer Correct Answer: C) The change in price is unknown, but quantity will decrease. 8. A legal minimum price A) Producer surplus. B) Price floor. C) Price ceiling. D) Price control. Show Answer Correct Answer: B) Price floor. 9. Which of the following policy actions would unambiguously reduce the supply of loanable funds and crowd out investment? A) An increase in taxes and a decrease in government spending. B) An increase in both taxes and government spending. C) A decrease in both taxes and government spending. D) A decrease in taxes together with an increase in government spending. Show Answer Correct Answer: D) A decrease in taxes together with an increase in government spending. 10. What are the determinants of aggregate demand? A) Consumption, investment, government spending, and net exports. B) Unemployment, taxes, inflation, and interest rates. C) Government spending, inflation, interest rates, and savings. D) Savings, exports, inflation, and interest rates. Show Answer Correct Answer: A) Consumption, investment, government spending, and net exports. 11. In recent years, people have benefited from greater amounts of leisure time. This trend: A) Has caused GDP to rise. B) Has caused GDP to fall. C) Made GDP fluctuate randomly. D) Is not accounted for in GDP. Show Answer Correct Answer: D) Is not accounted for in GDP. 12. How would Eurostat classify a 20-year old individual enrolled in college full-time and working 5 hours per week in the campus bookstore? A) Not surveyed. B) Not in the labor force. C) A discouraged worker. D) Unemployed. E) Employed. Show Answer Correct Answer: E) Employed. 13. What type of unemployment happens because of technology replacing human workers? A) Unjust. B) Frictional. C) Structural. D) Cyclical. Show Answer Correct Answer: C) Structural. 14. Which of the following is an example of an automatic stabilizer? When the economy goes into a recession, A) More people become eligible for unemployment insurance benefits. B) Stock prices decline, particularly for firms in cyclical industries. C) Congress begins hearings about a possible stimulus package. D) The Federal Reserve changes its target for the federal funds rate. Show Answer Correct Answer: A) More people become eligible for unemployment insurance benefits. 15. Which of the following is NOT one of the determinants of supply? A) Change in cost of production/resources. B) Change in number of sellers. C) Substitutes. D) Change in technology. Show Answer Correct Answer: C) Substitutes. 16. Which is NOT included in Gross Domestic Product (GDP) as a measure of the economy? A) Final goods and services. B) Work done at home such as house renovations. C) Dollars. D) Government spending. Show Answer Correct Answer: B) Work done at home such as house renovations. 17. Choices often have to be made because productive resources are limited while wants and needs are limited. This situation is known as A) Scarcity. B) Surplus. C) Budgeting. D) Borrowing. Show Answer Correct Answer: A) Scarcity. 18. What would be the effect on the demand for money curve (L) of a rise in the bond prices? A) L would shift to the left. B) There would not be an effect. C) L would shift to the right. D) There would be a movement down along L. Show Answer Correct Answer: D) There would be a movement down along L. 19. A leftward shift of the supply curve for avocados ( a normal good) might be caused by: A) An improvement in avocado picking techniques. B) A decrease in the wages that must be paid to avocado pickers. C) An increase in consumer incomes. D) Some avocado farmers leaving the market. E) A news report stating that avocados are associated with good health. Show Answer Correct Answer: D) Some avocado farmers leaving the market. 20. Which of the following is not a part of current account? A) Export of goods. B) Imports of services. C) Grants and gifts. D) FDI. Show Answer Correct Answer: D) FDI. ← 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