This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 120 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 120 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. These are all conventional macroeconomic objectives EXCEPT ..... A) To achieve economic growth. B) To achieve full employment. C) To achieve price stability. D) To achieve universal education. Show Answer Correct Answer: D) To achieve universal education. 2. Which of these is a correct description for one of the ways in which a command economy differs from a market economy? A) Market economies discourage free enterprise. B) In a market economy, the government sets prices. C) Command economies tend to have a higher per capita GDP. D) In a command economy, individuals have less economic freedom. Show Answer Correct Answer: D) In a command economy, individuals have less economic freedom. 3. In the Mundell-Flemming model with a floating exchange rate, expansionary monetary policy leads to a(n) ..... exchange rate, ..... income, and ..... net exports. A) Increased, unchanged, decreased. B) Decreased, increased, increased. C) Increased, increased, increased. D) None of above. Show Answer Correct Answer: B) Decreased, increased, increased. 4. If Frank's pay is cut by 2% due to poor economic conditions, but inflation is at-4% (deflation), Frank's purchasing power has A) Not changed. B) Increased. C) Decreased. D) None of above. Show Answer Correct Answer: B) Increased. 5. A period of macroeconomic expansion or growth, followed by a period of contraction, or decline. A) Business Cycle. B) Circular Flow. C) Equilibrium. D) GDP. Show Answer Correct Answer: A) Business Cycle. 6. What notes comes under money supply? A) Notes and coins. B) Money in current account. C) Money in savings account. D) Money in fixed account. Show Answer Correct Answer: D) Money in fixed account. 7. The ..... is the percentage increase in the overall level of prices per year. A) Inflation Rate. B) Deflation Rate. C) Real Wage. D) Real Income. Show Answer Correct Answer: A) Inflation Rate. 8. What is included in the macro market is..... A) Goods Market. B) Money market. C) Labor Market. D) Overseas Market. E) All true. Show Answer Correct Answer: E) All true. 9. When unemployment rises, what is likely to happen to GDP? A) GDP will stay flat. B) GDP will drop. C) A new GDP formula will be created. D) GDP will rise. Show Answer Correct Answer: B) GDP will drop. 10. The lowest legal wage allowed for one hour of work. A) Glass ceiling. B) Wage floor. C) Minimum wage. D) Wage ceiling. Show Answer Correct Answer: C) Minimum wage. 11. Under the Mundell-Fleming model, if there is an increase in the price level, the ..... curve shifts ....., since an increase in P causes a(n) ..... in the supply of real money balances. A) LM, right, increase. B) LM, left, decrease. C) IS, right, increase. D) LM, right, increase. Show Answer Correct Answer: B) LM, left, decrease. 12. Which phrase BEST describes the effect of an increase in U.S. steel imports? A) Less foreign steel bough by consumers. B) Fewer goods sold by U.S. steel companies. C) Higher wages for U.S. steel workers. D) Higher tariffs on foreign steel. Show Answer Correct Answer: B) Fewer goods sold by U.S. steel companies. 13. What is important to the economy of landlocked countries? A) Strong diplomatic relationships. B) Numerous ports. C) Goods that are desired by the surrounding countries. D) Rivers and lakes. Show Answer Correct Answer: A) Strong diplomatic relationships. 14. How does an inflationary gap self correct? A) Wages decrease, output increases. B) Wages decrease, output decreases. C) Wages increase, output decreases. D) Output increase, wages increase. Show Answer Correct Answer: C) Wages increase, output decreases. 15. The Federal Reserve System was established in A) 1799. B) 1881. C) 1863. D) 1913. Show Answer Correct Answer: D) 1913. 16. The national debt is approaching what important economic number? A) GDP per capita. B) Ice cream sale in July. C) Who knows? but it's big!. D) Annual GDP. Show Answer Correct Answer: D) Annual GDP. 17. Who appoints members of the Fed's Board of governors? A) Chair of the Board of Governors. B) The President. C) House of Representatives. D) Senate. Show Answer Correct Answer: B) The President. 18. Choose the CORRECT definition for business cycle A) The periods of business during its increasing profit rate. B) Composed periods of good trades with rising prosperity and low unemployment, also bad trades with falling prosperity and high unemployment. C) Composed periods of bad trades with falling prosperity and high unemployment. D) Periods where businesses starts selling their product. Show Answer Correct Answer: B) Composed periods of good trades with rising prosperity and low unemployment, also bad trades with falling prosperity and high unemployment. 19. What does the fundamental problem of economics imply? A) Governments must be relied upon to supply essential goods and services. B) Inflation and unemployment are unavoidable. C) Growing populations will deplete natural resources. D) Individuals and communities must make choices among competing alternatives. Show Answer Correct Answer: D) Individuals and communities must make choices among competing alternatives. 20. Study of general price level is a subject matter of: A) Microeconomics. B) Macroeconomics. C) Both (a) and (b). D) None of these. Show Answer Correct Answer: B) Macroeconomics. 21. An economy has a budget deficit, and you want to show the impact of the budget deficit on the real interest rate.What model would you use, and what would be the impact on the interest rate? A) The money market; the real interest rate is not impacted. B) The loanable funds market; real interest rate increases. C) The loanable funds market; real interest rate decreases. D) The AD-AS model; the real interest rate is not impacted. E) The money market; the real interest rate decreases. Show Answer Correct Answer: B) The loanable funds market; real interest rate increases. 22. Based on the economic figures in the table above, what is the value of gross domestic product, in billions of dollars? A) $ 5, 150. B) $ 4, 500. C) $ 4, 900. D) $ 5, 950. E) $ 4, 700. Show Answer Correct Answer: B) $ 4, 500. 23. What are the components of GDP? A) Consumption, investment, government spending, and net exports. B) Consumption, investment, taxes, and net exports. C) Consumption, investment, government spending, and imports. D) Consumption, savings, government spending, and exports. Show Answer Correct Answer: A) Consumption, investment, government spending, and net exports. 24. As a school teacher, Mr. Miedema gets a pay raise if he earns his Master's Degree. What theory of wage determination does this exemplify? A) Market Theory. B) Signaling Theory. C) Mediationary Arbitrative Theory. D) Negotiated Wages Theory. Show Answer Correct Answer: B) Signaling Theory. 25. The goals of macroeconomics include A) Higher price level. B) Full employment. C) Economic stagnation. D) Imbalance in balance of payment. Show Answer Correct Answer: B) Full employment. 26. Misusing seignorage can cause A) Disinflation. B) Hyperinflation. C) Deflation. D) Inflation. Show Answer Correct Answer: B) Hyperinflation. 27. What is likely to fall when the rate of unemployment in a country falls? A) Consumer spending. B) Government revenue from taxes. C) Business confidence. D) Government budget deficit. Show Answer Correct Answer: D) Government budget deficit. 28. A retired woman lives entirely on Social Security income, while a farmer borrows money to buy a new tractor. How would inflation affect them? A) Inflation helps the retiree but hurts the farmer. B) Inflation helps the bank but hurts the farmer and the retiree. C) Inflation hurts the farmer and the retiree. D) Inflation helps the farmer but hurts the retiree. E) Inflation hurts the bank but helps the farmer and the retiree. Show Answer Correct Answer: D) Inflation helps the farmer but hurts the retiree. 29. The payment of welfare benefits by the government: A) Is only included in the calculation of GDP if it is for unemployment benefits. B) Increases the value of GDP. C) Reduces the value of GDP. D) Is not included in the calculation of GDP. Show Answer Correct Answer: D) Is not included in the calculation of GDP. 30. How would Eurostat classify a 14-year old individual working 10 hours per week at a restaurant? A) A discouraged worker. B) Not surveyed. C) Not in the labor force. D) Employed. E) Unemployed. Show Answer Correct Answer: B) Not surveyed. ← 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