This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 1 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Government advisors have suggested the following policies to reduce youth unemployment. Which policy would not increase public expenditure? A) Cutting the minimum wage paid to young people. B) Raising the school-leaving age. C) Giving a subsidy to employers to recruit young people. D) Introducing a national military service for all. Show Answer Correct Answer: A) Cutting the minimum wage paid to young people. 2. The three endogenous variables found in the IS equation and the LM equation are? A) Y, P, and r. B) C, T, and I. C) L, r, and Y. D) C, I, and G. Show Answer Correct Answer: A) Y, P, and r. 3. The crowding out effect can only occur if the A) Personal savings rate increases. B) Government deficit spends. C) Government runs a surplus. D) Economy begins to boom. Show Answer Correct Answer: B) Government deficit spends. 4. TRUE or FALSE:Defensive expenditures are expenditures made to maintain the status quo. A) FALSE. B) TRUE. Show Answer Correct Answer: B) TRUE. 5. ??? expenditure:Expenditure on goods and services, wages, welfare payments and raw materials consumed within the current year. Short-term spending that has to be renewed each year A) Current. B) Long-run. C) Short-run. D) Capital. Show Answer Correct Answer: A) Current. 6. Business Investment is a measurement tool of GDP? A) True. B) False. Show Answer Correct Answer: A) True. 7. When imports exceed exports, there is a trade ..... A) Surplus. B) Deficit. C) Discrepancy. D) None of above. Show Answer Correct Answer: B) Deficit. 8. " To take an example, therefore, from a very trifling manufacture; but one in which the division of labor has been very often taken notice of, the trade of the ..... maker " A) Bread. B) Book. C) Shoe. D) Pencil. Show Answer Correct Answer: C) Shoe. 9. A worker at taco bell gets Cost of Living Adjustments every month. A) Helped by inflation. B) Hurt by inflation. Show Answer Correct Answer: A) Helped by inflation. 10. Which of the following would cause the aggregate supply curve to shift to the right? A) Increase in the amounts of imports. B) Decrease in the cost of an important input. C) Increase in consumer optimism. D) Increase in transfer payments. Show Answer Correct Answer: B) Decrease in the cost of an important input. 11. ..... the comparison among producers of a good according to their productivity A) Absolute Advantage. B) Comparative Advantage. C) Opportunity Cost. D) None of above. Show Answer Correct Answer: A) Absolute Advantage. 12. Increasing the money supply too much will cause ..... A) Increased interest rates. B) Decreased interest rates. C) Massive deflation. D) Massive inflation. Show Answer Correct Answer: D) Massive inflation. 13. Gross Domestic Products (GDP) measures A) The market value of intermediate products produced during the year. B) The sum of the market value of both final and intermediate products produced during the year. C) The sum of the market value of final products produced and imported during the year. D) The market value of final products produced in the nation during the year. Show Answer Correct Answer: D) The market value of final products produced in the nation during the year. 14. Which group within the Federal Reserve system decides whether to raise or lower interest rates and is the Fed's primary monetary policymaking body? A) Federal Reserve Banks. B) Board of Governors. C) Federal Advisory Council. D) Federal Open Market Committee. Show Answer Correct Answer: D) Federal Open Market Committee. 15. Which of these best defines equilibrium in a market? A) A situation in which quantity supplied is greater than quantity demanded. B) A situation in which quantity demanded is greater than quantity supplied. C) A situation in which quantity supplied and quantity demanded are equal. D) A situation where a minimum price is set. Show Answer Correct Answer: C) A situation in which quantity supplied and quantity demanded are equal. 16. Assume that the opportunity cost of producing wheat is lower in Australia compared with Malaysia. Further assume that the opportunity cost of producing cars is higher in Australia compared with Malaysia. Which country has a comparative advantage in producing cars? A) Australia and Malaysia. B) Australia. C) Malaysia. D) Both countries have to specialise in producing wheat. Show Answer Correct Answer: C) Malaysia. 17. The " Tax Cuts and Jobs Act of 2017, " passed by Congress is an example of: A) International Trade Policy. B) Regulatory Policy. C) Fiscal Policy. D) Monetary Policy. Show Answer Correct Answer: C) Fiscal Policy. 18. Assume that the market for bottled water is in equilibrium. If both the supply of and the demand for bottled water decrease, what will be the effect on equilibrium price and quantity? A) Price-Indeterminate / Quantity-Decrease. B) Price-Decrease / Quantity-Increase. C) Price-Increase / Quantity-Decrease. D) Price-Decrease / Quantity-Decrease. E) Price-Increase / Quantity-Indeterminate. Show Answer Correct Answer: A) Price-Indeterminate / Quantity-Decrease. 19. Tax incentives to increase private savingaffect on steady state level and steady state growth of total output per person A) Increases s.s level, s.s growth rate unchanged. B) Increases s.s level, s.s growth rate decreases. C) Decreases s.s level, s.s growth rate unchanged. D) Increases s.s level, s.s growth rate increases. Show Answer Correct Answer: A) Increases s.s level, s.s growth rate unchanged. 20. Golden rule with population growth A) False. B) C*=f(k*)-( $\delta$ $\delta$. Show Answer Correct Answer: B) C*=f(k*)-( $\delta$ $\delta$. 21. Right to own private property is found in A) Socialism. B) Capitalism. C) Mixed economy. D) Both B and C. Show Answer Correct Answer: D) Both B and C. 22. John is studying economics and he came across a term that represents the percentage of a nation's labor force that is unemployed. Can you help him identify the term? A) Consumer Price Index. B) Gross Domestic Product. C) Unemployment. D) Inflation. Show Answer Correct Answer: C) Unemployment. 23. Who does outsourcing hurt economically? A) American workers/home country. B) Workers in other countries. C) American company owners/CEOs. D) Video Gamers. Show Answer Correct Answer: A) American workers/home country. 24. Which of the following best describes why the money supply curve is vertical? A) Individuals hold less money when interest rates increase. B) The central bank responds to increases in the interest rate by increasing the quantity of money supplied. C) Central banks determine the monetary base independent of the interest rate. D) Savers want to supply more money when interest rates are high. E) The central bank sets interest rates and changes the quantity of money accordingly. Show Answer Correct Answer: C) Central banks determine the monetary base independent of the interest rate. 25. Explain the concept of aggregate demand and aggregate supply. A) Aggregate demand is the total demand for goods and services in an economy, while aggregate supply is the total supply of goods and services that producers are willing and able to provide. B) Aggregate demand is the total demand for goods and services in an economy, while aggregate supply is the total supply of goods and services that government agencies are willing and able to provide. C) Aggregate demand is the total demand for goods and services in an economy, while aggregate supply is the total supply of goods and services that consumers are willing and able to provide. D) Aggregate demand is the total demand for goods and services in a specific industry, while aggregate supply is the total supply of goods and services in the entire economy. Show Answer Correct Answer: A) Aggregate demand is the total demand for goods and services in an economy, while aggregate supply is the total supply of goods and services that producers are willing and able to provide. 26. A ..... is a formula that determines the central bank's actions. A) Political Business Cycle. B) Discretionary Monetary Policy. C) Macroeconomic Policy Activism. D) Monetary Policy Rule. Show Answer Correct Answer: D) Monetary Policy Rule. 27. When a price ceiling is in place keeping the price below the market price, which is true of the quantity demanded & quantity supplied? A) Quantity Demanded is greater. B) Quantity Demanded equals Quantity supplied. C) Quantity Supplied is greater. D) None of above. Show Answer Correct Answer: A) Quantity Demanded is greater. 28. ..... are the currency that banks hold in their vaults plus their deposits at the Federal Reserve. A) Reserve Requirements. B) Required Reserve Ratio. C) Reserve Ratio. D) Bank Reserves. Show Answer Correct Answer: D) Bank Reserves. 29. Which of the following groups suffer from high inflation A) Property Investors. B) Borrowers. C) Lenders. D) Taxpayers. Show Answer Correct Answer: C) Lenders. 30. Which of the following is a reason why fruit would not be viable form of money? A) They have no store of value. B) Money can only be in the form of paper currency. Show Answer Correct Answer: A) They have no store of value. Next →Related QuizzesEconomics QuizzesFinance QuizzesMacroeconomics 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