This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 11 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 11 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Mexico has the world's ..... largest GDP A) 43rd. B) 15th. C) 50th. D) 8th. Show Answer Correct Answer: B) 15th. 2. Which one of the following statements is FALSE? A) Keynesian macroeconomists would not recommend expansionary fiscal policy. B) Classical macroeconomists would not recommend expansionary fiscal policies. C) The classical macroeconomic model has a downward-sloping AD curve. D) The classical macroeconomic model has a vertical AS curve. E) Keynesian macroeconomists believe that fiscal policy can change the equilibrium level of output. Show Answer Correct Answer: A) Keynesian macroeconomists would not recommend expansionary fiscal policy. 3. The "efficiency wage" theory states that ..... A) Employers can motivate employees by paying them more than the prevailing wage. B) There is only one wage rate that will result in equilibrium in the labor market. C) Existing employees can keep their wages artificially high as compared to newer workers. D) Wages should be set with long-term contracts to avoid inefficiencies associated with temporary changes in market conditions. E) Wages should be set with short-term contracts to allow for the maximum flexibility as market conditions change. Show Answer Correct Answer: A) Employers can motivate employees by paying them more than the prevailing wage. 4. What is the Gini Coefficient of a country with low levels of inequality A) 0.60. B) 0.20. C) 0.40. D) 0.00. Show Answer Correct Answer: B) 0.20. 5. Which type of employment is characterized by the need of or the lack of skills? A) Cyclical. B) Structural. C) Frictional. D) Seasonal. Show Answer Correct Answer: B) Structural. 6. A country's ..... accounts are a summary of their transactions with other countries A) Line of credit. B) Income statement. C) Balance of payment. D) Exchange. Show Answer Correct Answer: C) Balance of payment. 7. ..... are rules set by the Federal Reserve that determine the required reserve ratio for banks. A) Required Reserve Ratio. B) Reserve Ratio. C) Bank Reserves. D) Reserve Requirements. Show Answer Correct Answer: D) Reserve Requirements. 8. The type of goods that if income increases, the amount of goods consumed will decrease is..... A) Normal goods. B) Inferior goods. C) Superior goods. D) Giffen goods. Show Answer Correct Answer: B) Inferior goods. 9. What happens to demand and price of a product when the popularity increases? A) Stays the same. B) Increases. C) Decreases. D) There is no demand for popular goods. Show Answer Correct Answer: B) Increases. 10. The government begins funding training programs to teach computer repair and website design to unemployed adults. Which kind of unemployment would such training help MOST? A) Cyclical. B) Seasonal. C) Frictional. D) Structural. Show Answer Correct Answer: D) Structural. 11. A disadvantage of a command economy A) It cannot "change direction" easily. B) Items are produced only for profit. C) The government may produce things people don't need or want. D) It does little to help the less advantaged obtain what they need. Show Answer Correct Answer: C) The government may produce things people don't need or want. 12. Contractionary Fiscal Policy A) Output is low and unemployment is more than NRU. Actual GDP is below potential GDP. B) Laws that reduce inflation, decrease GDP (Close an Inflationary Gap)-G or + taxes (-C). C) Output is high and unemployment is less than NRU. Actual GDP is above potential GDP. D) A gap with higher prices and a decrease in GDP. E) Laws that reduce unemployment and increase GDP (Close a Recessionary Gap) + G or-taxes (+C). Show Answer Correct Answer: B) Laws that reduce inflation, decrease GDP (Close an Inflationary Gap)-G or + taxes (-C). 13. Which of the following is an example of an automatic stabilizer? A) Discretionary fiscal policy. B) Autonomous consumption. C) Progressive income taxes. D) Cyclical unemployment. E) The spending multiplier. Show Answer Correct Answer: C) Progressive income taxes. 14. Which combination of fiscal and monetary policy would speed up the economy? A) Increase taxes; decrease reserve requirement. B) Increase spending; increase interest on reserves. C) Decrease taxes; decrease discount rate. D) Decrease spending; sell bonds via open market operations. Show Answer Correct Answer: C) Decrease taxes; decrease discount rate. 15. Brandon hires a polling and data firm to research the income levels of people living in three zip codes in San Antonio. What basic economic question is he seeking an answer to? A) For whom to produce?. B) How to produce?. C) How much to produce?. D) What to produce?. Show Answer Correct Answer: A) For whom to produce?. 16. If GDP falls for at least two quarters, it is considered what stage of the business cycle? A) Prosperity. B) Recovery. C) Expansion. D) Recession. Show Answer Correct Answer: D) Recession. 17. CAR PURCHASED BY A CAR DEALER FOR RESALE A) CAPITAL GOOD. B) CONSUMER GOOD. C) INTERMEDIATE GOOD. D) FINAL GOOD. Show Answer Correct Answer: C) INTERMEDIATE GOOD. 18. Measuring the sum total of all factor payments will be called, A) Income method. B) Output method. C) Expenditure method. D) Product method. Show Answer Correct Answer: A) Income method. 19. Macroeconomics distinguishes the real economy and the ..... A) Normative economy. B) Monetary economy. C) Virtual economy. D) Underground economy. Show Answer Correct Answer: B) Monetary economy. 20. Economists use ..... to estimate the contribution of each major factor in the aggregate production function to economic growth. A) Deflation Accounting. B) Contraction Accounting. C) Inflation Accounting. D) Growth Accounting. Show Answer Correct Answer: D) Growth Accounting. 21. What is the formula for calculating the GDP of a country? A) C-I+G+NX= GDP. B) CxIxGxNX= GDP. C) C+I+G+NX= GDP. D) C-I-GxNX= GDP. Show Answer Correct Answer: C) C+I+G+NX= GDP. 22. The Federal Reserve has three primary goals. What does it mean to have full employment? A) To control inflation. B) To ensure maximum employment. C) To increase production output. D) None of above. Show Answer Correct Answer: B) To ensure maximum employment. 23. The economy of Franklandia has invested in research and development of new technologies and production methods. In the long run, how would this be illustrated on the AS/AD model? A) Economic growth and a rightward shift of AD. B) Economic growth and a rightward shift of SRAS. C) A recessionary gap and a rightward shift of LRAS. D) Economic growth and a rightward shift of LRAS. E) An inflationary gap and a rightward shift of SRAS. Show Answer Correct Answer: D) Economic growth and a rightward shift of LRAS. 24. A business where shareholders have limited liability and majority shareholders run the business as chief officers ..... A) Sole proprietorship. B) Corporation. C) Partnership. D) Pure or Perfect Market competition. Show Answer Correct Answer: B) Corporation. 25. Hyperinflation is typically caused by ..... A) Continuous expansion of the money supply to finance budget deficits. B) Bad harvests that lead to widespread shortages. C) Large decline in corporate profits that leads to a decrease in production. D) High tax rates that discourage work effort. Show Answer Correct Answer: A) Continuous expansion of the money supply to finance budget deficits. 26. Taxing & increasing government spending to help the economy grow is referred to as A) Contractionary policy. B) Expansionary policy. C) Monetary policy. D) Budget deficit. Show Answer Correct Answer: B) Expansionary policy. 27. Government bonds are also known as government ..... ? A) Deficit. B) Inflation. C) Surplus. D) Securities. Show Answer Correct Answer: D) Securities. 28. The ..... runs from October 1 to September 30 and is labeled according to the calendar year in which is ends. A) Fiscal Year. B) Government Year. C) Calendar Year. D) Money Year. Show Answer Correct Answer: A) Fiscal Year. 29. What is defined as countries becoming more open to foreign trade and investment? A) Exchange Rate Policy. B) Globalization. C) Isolationism. D) Embargo. Show Answer Correct Answer: B) Globalization. 30. Which group is included in the unemployment rate? A) Retired adults. B) High school and college students. C) Laid-off workers looking for jobs. D) Disabled adults. Show Answer Correct Answer: C) Laid-off workers looking for jobs. ← PreviousNext →Related QuizzesEconomics QuizzesFinance QuizzesMacroeconomics Quiz 1Macroeconomics Quiz 2Macroeconomics Quiz 3Macroeconomics Quiz 4Macroeconomics Quiz 5Macroeconomics Quiz 6Macroeconomics Quiz 7Macroeconomics Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books