This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 125 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 125 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. If interest rates are reduced to near zero, then monetary policy is ineffective, it is called..... A) Tax. B) Inflation. C) Liquidity Trap. D) Depression. Show Answer Correct Answer: C) Liquidity Trap. 2. If the government raises taxes on businesses, AS will? A) AS increases. B) AS decreases. C) AD decreases. D) None of above. Show Answer Correct Answer: B) AS decreases. 3. The dollar value of all final goods and services produced within a country's borders in one year. Most important measure of economic growth A) Nominal GDP. B) Real GDP. C) GDP Per Capita. D) Gross Domestic Product. Show Answer Correct Answer: D) Gross Domestic Product. 4. If Mrs. Murat left her job to go back to college to get her administration degree. A) Cyclical unemployment. B) Frictional unemployment. C) Structural unemployment. D) Seasonal unemployment. Show Answer Correct Answer: B) Frictional unemployment. 5. A change in the expected price level shifts A) The aggregate-demand curve. B) The short-run aggregate-supply curve, but not the long-run aggregate-supply curve. C) The long-run aggregate-supply curve, but not the short-run aggregate-supply curve. D) Both the short-run and the long-run aggregate-supply curves. Show Answer Correct Answer: B) The short-run aggregate-supply curve, but not the long-run aggregate-supply curve. 6. Which of the following are responsible for making fiscal policy decision? A) The President and Congress. B) The Federal Reserve System. C) The National Council of Economic Advisors. D) The commerce Department. Show Answer Correct Answer: A) The President and Congress. 7. A ..... takes place when firms involved in different steps of manufacturing or marketing come together. A) Diagonal merger. B) Circular merger. C) Vertical merger. D) Horizontal merger. Show Answer Correct Answer: C) Vertical merger. 8. An event that shows a general and continuous increase in prices is called..... A) Inflation. B) Recession. C) Devaluation. D) Deflation. Show Answer Correct Answer: A) Inflation. 9. What factor that determine the labor supply under Keynesian? A) Nominal wage. B) Real wage. C) Expected nominal wage. D) Expected real wage. Show Answer Correct Answer: D) Expected real wage. 10. Last year, the CPI (Consumer Price Index) was equal to 110. This year, the CPI is equal to 121. What is the inflation rate this year? A) 10 percent. B) 11 percent. C) 12 percent. D) 6 percent. Show Answer Correct Answer: A) 10 percent. 11. The revenue maximized when: A) MPL=W/P. B) MPL=R/P. C) MPK=W/P. D) MPK=R/P. Show Answer Correct Answer: A) MPL=W/P. 12. Which of the following might upset the board of directors in a corporation? A) If the company's stocks lose value. B) If the company's stocks increase in value. C) If the company's stocks are sold on an exchange. D) If the company's stocks are bought on an exchange. Show Answer Correct Answer: A) If the company's stocks lose value. 13. Which one of the following is most likely to lead to a supply-side improvement in an economy? An increase in A) Innovation by firms. B) The availability of imports. C) Government spending on welfare benefits. D) Company taxation to reduce the government's budget deficit. Show Answer Correct Answer: A) Innovation by firms. 14. The payments workers receive in return for work. A) Human Capital. B) Wages. C) Glass Ceiling. D) Wage Rate. Show Answer Correct Answer: B) Wages. 15. What are the four characteristics of a "good tax?" A) Small, Funds Education, Easily Paid, Fun. B) Estate, Income, Corporate, Proportional. C) Withholding, Gift, Federal, State. D) Simplicity, Efficiency, Certainty, Equity. Show Answer Correct Answer: D) Simplicity, Efficiency, Certainty, Equity. 16. Who may be eligible for survivor benefits through the Social Security system? A) The parents of a deceased worker. B) The spouse and children of a deceased worker. C) The siblings of a deceased worker. D) All of the above. Show Answer Correct Answer: B) The spouse and children of a deceased worker. 17. In the circular flow diagram, which section is where business purchase productive resources needed to make products? A) Households. B) Firms. C) Factor market. D) Product market. Show Answer Correct Answer: C) Factor market. 18. Which statement(s) is/are correct regarding capital expenditure? A) They create liability. B) They create assets. C) They reduce liability. D) They reduce assets. E) They create assets and (or) reduce liability. Show Answer Correct Answer: E) They create assets and (or) reduce liability. 19. Primary sector comprises..... A) Manufacturing, construction, utility supply such as electricity, gas and water. B) Agriculture, forestry, fishing, mining, farming. C) Banking, transportation, communication, wholesale, retailing. D) Services and banking. Show Answer Correct Answer: B) Agriculture, forestry, fishing, mining, farming. 20. The commercial banking system creates money when banks A) Purchase bonds from the Fed. B) Decreae loans to business. C) Sell stock to the public. D) Make loans to the public. Show Answer Correct Answer: D) Make loans to the public. 21. Which is the instrument of monetary policy? A) Legal cash reserve requirement. B) Taxes. C) Government Expenditure. D) Income received from households. Show Answer Correct Answer: A) Legal cash reserve requirement. 22. Every decision involves trade-offs. What is this called? A) Opportunity cost. B) Involuntary trade. C) Goods. D) Services. Show Answer Correct Answer: A) Opportunity cost. 23. Balance on BOT can be: A) Surplus. B) Balanced. C) Deficit. D) Any of the above. Show Answer Correct Answer: D) Any of the above. 24. The term when govt budget deficit raising real interest rate and decrease investment is called A) Crowding-out effect. B) Ricardo-barro effect. C) Multiplier effect. D) Crowding-in effect. Show Answer Correct Answer: A) Crowding-out effect. 25. Limitations of using market-based supply-side policies to increase the level of economic activity do no include A) Inflationary pressures. B) Pressure of the government's budget. C) The negative impact on the natural environment. D) Time lags. Show Answer Correct Answer: A) Inflationary pressures. 26. Coal, iron ore, petroleum, diesel etc. are the examples of A) Biotic resources. B) Abiotic resources. C) Renewable resources. D) Non-Renewable resources. Show Answer Correct Answer: D) Non-Renewable resources. 27. According to IMF's latest projections, what is India's estimated real output growth for FY 2023-24? A) 9.6%. B) 5.9%. C) 7.2%. D) 4.2%. Show Answer Correct Answer: B) 5.9%. 28. Which of the following creates a surplus of goods? A) Equilibrium price. B) Price ceiling. C) Market price. D) Price floor. Show Answer Correct Answer: D) Price floor. 29. A measure of how well people live, how much "stuff" people have A) Installment buying. B) Standard of living. C) Mass advertising. D) Assembly lines. Show Answer Correct Answer: B) Standard of living. 30. Demand pull inflation arises from: A) Increased cost of raw materials. B) An overall increase in demand. C) Decrease in consumer spending. D) Reduced labor costs. Show Answer Correct Answer: B) An overall increase in demand. ← 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