This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 112 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 112 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. In the business cycle an expansion is ..... A) A period where the economy hits the bottom of the contractionary phase. B) A period where the economy reaches its highest point and begins to decline. C) A period of recovery from a recession and increased economic growth. D) A period of economic decline and rise in unemployment. Show Answer Correct Answer: C) A period of recovery from a recession and increased economic growth. 2. Lois and Lora plan to open a florist shop. Lois is unable to devote full time to the daily operations of the shop but wishes to provide financial support. Which form of business partnership is most likely to appeal to Lois? A) General. B) Limited. C) Nonprofit. D) Private. Show Answer Correct Answer: B) Limited. 3. E = nominal exchange rate A) Relative price of domestic currency in terms of foreign currency. B) Relative price of foreign currency in terms of domestic currency. Show Answer Correct Answer: A) Relative price of domestic currency in terms of foreign currency. 4. A company or person who makes things. A) Producer. B) Services. C) Goods. D) Consumer. Show Answer Correct Answer: A) Producer. 5. The sale of a used automobile would not be included in GDP of the current year because it is a: A) Private transfer payment. B) Nonproduction transaction. C) Purely financial transaction. D) Nonmarket transaction. Show Answer Correct Answer: B) Nonproduction transaction. 6. When the FED is conducting open market operations, they are buying or selling A) Factors in the factor market. B) Goods in the product market. C) Government bonds. D) Stocks on the New York Stock Exchange. Show Answer Correct Answer: C) Government bonds. 7. The FED Bank reserve system A) Tells banks how much they SHOULD loan. B) Tells banks what they must charge for interest. C) Tells bank how much they must keep in their ATM's. D) Tells banks how much must be in their vaults at all times. Show Answer Correct Answer: D) Tells banks how much must be in their vaults at all times. 8. When the spread between 10-year US Treasury yields and the federal fundsrate narrows and at the same time the prime rate stays unchanged, this mix ofindicators most likely forecasts future economic: A) Growth. B) Decline. C) Stability. D) None of above. Show Answer Correct Answer: B) Decline. 9. Fiscal Policy is the means by which the government keeps the economy stable through taxes and programs provided to the people. A) False. B) True. Show Answer Correct Answer: B) True. 10. According to the ....., the interest rate is determined by the supply and demand for money. A) Liquidity Preference Model of the Interest Rate. B) Illiquidity Preference Model of the Interest Rate. C) Supply and Demand Model of the Interest Rate. D) None of above. Show Answer Correct Answer: A) Liquidity Preference Model of the Interest Rate. 11. Why is zero percent unemployment not our goal? A) Because people will always be between jobs or replaced by technology. B) The amount of employment that exists when the economy is healthy and growing. C) If people leave the labor force, the unemployment rate falls. D) Some people are no longer looking for a job because they have given up. Show Answer Correct Answer: A) Because people will always be between jobs or replaced by technology. 12. When a good has a price floor, what occurs? A) There is a surplus of available goods . B) The supply of goods remains constant. C) There is a shortage of available goods. D) The quantity demanded is equal to the quantity supplied. Show Answer Correct Answer: A) There is a surplus of available goods . 13. We humans have a brain that has unlimited wants, but we live in a world of limited resources. This is known as: A) Scarcity. B) Brevity. C) Life-style. D) Amygdalaian response. Show Answer Correct Answer: A) Scarcity. 14. Which one of the following people would NOT be classified as unemployed according to Eurostat? A) Someone in the labor force who has just involuntarily lost their job, and is actively searching for a new one. B) Someone in the labor force who has just quit a job, and is actively searching for a new one. C) Someone who has just started actively searching for a job after graduating from college. D) Someone working 20 hours per week in a family business but is not being paid. E) Someone who took time off to raise a child and has just started actively searching for a job. Show Answer Correct Answer: D) Someone working 20 hours per week in a family business but is not being paid. 15. If the rate of inflation rises above their target level what does the Federal Reserve do? A) They put more money into circulation. B) They take excess money out of circulation. C) Increasing bond prices. D) Decreases interest rates. Show Answer Correct Answer: B) They take excess money out of circulation. 16. The government's act of buying bonds is used to ..... A) Stop inflation. B) Fight recession. Show Answer Correct Answer: B) Fight recession. 17. Assume that the United States current account balance is zero. If the United States dollar appreciates against the Japanese yen, then demand for United States exports will A) Increase and result in a deficit in the United States financial account. B) Increase and result in a surplus in the United States financial account. C) Decrease and result in a surplus in the United States financial account. D) Decrease and result in a deficit in the United States financial account. E) Remain unchanged because the surplus in the current account will be offset by the deficit in the financial account. Show Answer Correct Answer: C) Decrease and result in a surplus in the United States financial account. 18. Macroeconomis could be defined as ..... A) The part of economics concerned with large-scale or general economic factors and policies that affected millions of people. B) Is the study of what is likely to happen (tendencies) when individuals make choices in response to changes in incentives, prices, resources, and/or methods of production. Show Answer Correct Answer: A) The part of economics concerned with large-scale or general economic factors and policies that affected millions of people. 19. The Fed keeps a certain amount of money out of circulation. This is referred to as ..... A) Reserve requirement. B) Stockpile. C) Emergency Fund. D) Hoard. Show Answer Correct Answer: A) Reserve requirement. 20. In economics allocation means ..... A) The process by which economic resources get allotted (apportioned, assigned) to their particular uses for directly or indirectly satisfying human wants. B) The process by which economic resources get allotted (apportioned, assigned) for general uses for directly or indirectly satisfying human wants. Show Answer Correct Answer: A) The process by which economic resources get allotted (apportioned, assigned) to their particular uses for directly or indirectly satisfying human wants. 21. The market value of all the final goods and services produced within a country in a given time period. A) Gross Domestic Product. B) Net exports of goods and services. C) Nominal GDP. D) Real GDP. Show Answer Correct Answer: A) Gross Domestic Product. 22. GDP is calculated by A) Adding up the cost of goods used in producing the item. B) Subtracting all costs from total revenue. C) Adding consumption + investment +government spending+ (exports sold-imports bought). D) None of above. Show Answer Correct Answer: C) Adding consumption + investment +government spending+ (exports sold-imports bought). 23. Below are the main concerns of Macroeconomics, except A) National Output. B) Inflation. C) Unemployment. D) Aggregate Demand. Show Answer Correct Answer: D) Aggregate Demand. 24. Plants and fertilizer are complements. If the price of fertilizer increases, what will happen in the market for plants? A) Supply increase. B) Supply decrease. C) Demand increase. D) Demand decrease. Show Answer Correct Answer: D) Demand decrease. 25. Diminishing returns to physical capital means that, when the amount of human capital per worker and the state of technology are held fixed, each increase in the amount of physical capital per worker leads to: A) A smaller increase in productivity. B) A decrease in productivity. C) Negative productivity. D) Losses for stockholders. E) A constant increase in productivity. Show Answer Correct Answer: A) A smaller increase in productivity. 26. One indicator of the level of price is..... A) Consumer price index (CPI). B) Producer price index. C) Core inflation. D) All true. Show Answer Correct Answer: D) All true. 27. In the USA, seignorage accounts for about ..... percentage of the US government's budget. A) 0-1%. B) 6-8%. C) +10%. D) 3-5%. Show Answer Correct Answer: A) 0-1%. 28. In discussing the business cycle, an 'expansion' is often referred to as ..... A) Pre-peak. B) Peak. C) Contraction. D) Recovery. Show Answer Correct Answer: D) Recovery. 29. What are the two main sources of inflows of funds to EU, in general? A) Government borrowing and social security contributions. B) Social security taxes and wealth taxes. C) Personal income taxes and corporate taxes. D) Personal income taxes, value added taxes, and social security contributions. E) Government borrowing and personal income taxes. Show Answer Correct Answer: D) Personal income taxes, value added taxes, and social security contributions. 30. A government wishes to stimulate economic activity in its national economy. Which action will assist this? A) Increasing indirect taxation. B) Decreasing income tax. C) Increasing interest rates. D) Decreasing government investment. Show Answer Correct Answer: B) Decreasing income tax. ← 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