This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 122 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 122 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which phase of the business cycle would be most closely associated with an economic contraction? Select one: A) Trough. B) Recession. C) Recovery. D) Peak. Show Answer Correct Answer: B) Recession. 2. In the short run, an increase in the Money Supply pushes interest rates ....., while in the long run interest rates ..... A) Up, increase. B) Up, don't change. C) Down, don't change. D) Down, increase. Show Answer Correct Answer: C) Down, don't change. 3. Keynes's lecturer in economics at Cambridge University was- A) David Ricardo. B) Milton Friedman. C) Paul Samuelson. D) Alfred Marshall. Show Answer Correct Answer: D) Alfred Marshall. 4. Country A's growth rate in per capita real gross domestic product (GDP) has been consistently higher than that of Country B. Which of the following factors can account for these differences in the per capita GDP growth rates? A) Country B's government gives more investment tax credits. B) The labor force of Country A is becoming more skilled than the labor force of Country B. C) The natural rate of unemployment is higher in Country A. D) Country A's central bank is less effective at controlling the inflation rate. E) Although the populations of Countries A and B are the same, Country A has twice as many people who are retired. Show Answer Correct Answer: B) The labor force of Country A is becoming more skilled than the labor force of Country B. 5. Long-run economic growth will be sustainable: A) Because pollution and urban sprawl are not real problems. B) As there are plenty of natural resources still left and these can be consumed in the future. C) If it can continue in spite of the limited supply of natural resources and the impact of growth on environment. D) As the natural resource scarcity and other environmental issues are not really as serious as they seem. E) Because there will always be natural resources available to purchase from developing nations where pollution is not an environmental issue. Show Answer Correct Answer: C) If it can continue in spite of the limited supply of natural resources and the impact of growth on environment. 6. The total population of an economy is 175 million, the labor force is 125 million, and the number of employed workers is 117 million. The unemployment rate for this economy is: A) 7.8 percent. B) 5.8 percent. C) 6.4 percent. D) 3.3 percent. Show Answer Correct Answer: C) 6.4 percent. 7. All the following are the objectives of monetary policy except ..... A) To achieve the balance of payment. B) To achieve higher economic growth. C) To achieve full employment of resources. D) To maintain domestic price instability. Show Answer Correct Answer: D) To maintain domestic price instability. 8. The natural rate of unemployment is between: A) 3% and 6%. B) 2% and 4%. C) 4% and 7%. D) 4% and 6%. Show Answer Correct Answer: D) 4% and 6%. 9. Why economic modeling need to be simplicated? A) To mislead by ignoring important features of the economy. B) To make the model more complicated. C) To make the model more realistic. D) To clarify thinking by focusing on underlying connections. Show Answer Correct Answer: D) To clarify thinking by focusing on underlying connections. 10. Suppose autonomous consumption is $ 20, investment is $ 30, government expenditure is 40, net exports 10. Assume the mpc=0.7 and the tax rate=0.2. What is the equilibrium GDP for the open economy? A) AE = 100 + 0.56Y. B) C = 20 + 0.56Y. C) $ 227.27. D) None of above. Show Answer Correct Answer: C) $ 227.27. 11. What type of economy is the USA? A) Market. B) Command. C) Mixed. D) None of above. Show Answer Correct Answer: A) Market. 12. Due to the presence of diminishing returns to capital, doubling the amount of physical capital available for one worker to use will: A) Increase output by less than a factor of two. B) Increase output by exactly a factor of two. C) Decrease output by more than a factor of two. D) Increase output by more than a factor of two. E) Decrease output by less than a factor of two. Show Answer Correct Answer: A) Increase output by less than a factor of two. 13. Which of these is not a benefit of HS2 to Bentley? A) Improved connectivity with the rest of UK. B) Reduction in delivery times as there will be less congestion. C) New workers from around the country are able to join the firm and commute in. D) Bentley will have to pay less tax to the government. Show Answer Correct Answer: D) Bentley will have to pay less tax to the government. 14. This type of tax takes a higher percentage of a lower wage earner's income A) Proportional. B) Flat. C) Regressive. D) Progressive. Show Answer Correct Answer: C) Regressive. 15. The Federal Reserve's two primary goals DO NOT include A) Maximum sustainable employment. B) Stable inflation. C) Diversification of the economy. D) None of above. Show Answer Correct Answer: C) Diversification of the economy. 16. Which factor most directly affects the quantity of a good or service demanded in the market? A) . changes in related goods. B) Changes in costs of resources. C) Producer expectations. D) Safety regulations. Show Answer Correct Answer: A) . changes in related goods. 17. Fiscal Policy is concerned with A) Government Spending and taxation. B) Consumer spending and productivity. C) Government spending and the money supply. D) Taxation and inflation. Show Answer Correct Answer: A) Government Spending and taxation. 18. Percent increase in the overall level of prices per year A) Inflation Rate. B) Aggregate Demand. C) Budget. D) Budget Surplus. Show Answer Correct Answer: A) Inflation Rate. 19. An ..... is a reduction in the value of money held by the public caused by inflation. A) Inflation Tax. B) Cost-Push Inflation. C) Demand-Pull Inflation. D) Disinflation. Show Answer Correct Answer: A) Inflation Tax. 20. A mine that contains both silver and gold would be an example of which of the following Factors of Production? A) Land. B) Labor. C) Capital. D) Entrepreneurship. Show Answer Correct Answer: A) Land. 21. Macro economics is also known as Theory of Income And Employment- A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 22. A group of deaf rats pass through a sewer hole. How many are there? A) 24. B) 12. C) 30. D) 18. Show Answer Correct Answer: A) 24. 23. The time and method for paying the tax should be suitable A) Convenience canon of taxation. B) Equity canon of taxation. C) Certainty canon of taxation. D) Economy canon of taxation. Show Answer Correct Answer: A) Convenience canon of taxation. 24. What is an indicator of economic stability? A) High unemployment rate. B) Decreasing productivity. C) General price levels. D) Low GDP growth. Show Answer Correct Answer: C) General price levels. 25. Which is not a Characteristic of Money? A) Divisibility. B) Portability. C) Invincibility. D) Durability. Show Answer Correct Answer: C) Invincibility. 26. The act of limiting the kinds of goods and services produced A) Comparative advantage. B) Specialization. C) Absolute advantage. D) Dependent. Show Answer Correct Answer: B) Specialization. 27. If the Federal reserve and Government are attempting to encourage growth and stimulate the economy, which actions would each take? (monetary / fiscal) A) Sell government securities / decrease taxes. B) Decrease the interest rate / increase government spending. C) Increase the Required reserve / increase government spending. D) Buy government securities / decrease government spending. Show Answer Correct Answer: B) Decrease the interest rate / increase government spending. 28. The country's gross domestic product is A) $ 304 billion. B) $ 347 billion. C) $ 309 billion. D) $ 220 billion. E) $ 282 billion. Show Answer Correct Answer: D) $ 220 billion. 29. If an economy experiences a sudden increase in prices, which fiscal policy action should be taken? A) Increasing the reserve requirements. B) Selling government securities on the open market. C) Increasing taxes. D) Increasing interest rates. Show Answer Correct Answer: C) Increasing taxes. 30. The aggregate demand curve slopes downward because a decrease in the price level means a(n) ..... in the real money supply and therefore a ..... level of real spending. A) Decrease; higher. B) Decrease; lower. C) Increase; lower. D) Increase; higher. Show Answer Correct Answer: D) Increase; higher. ← 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