This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 144 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 144 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is a sustained increase in the price level in an economy over time? A) Hyperinflation. B) Stagflation. C) Inflation. D) Deflation. Show Answer Correct Answer: C) Inflation. 2. When budget receipts are greater than budget expenditure such type of budget is called: A) Balanced budget. B) Deficit budget. C) Surplus budget. D) None of these. Show Answer Correct Answer: C) Surplus budget. 3. Fred Jones withdraws $ 1, 000 in cash from his savings account. What immediate effect does this transaction have on the monetary aggregate measures of M1 and M2? A) M1 | Increases-M2 | Decrease. B) M1 | Decrease-M2 | No Change. C) M1 | No Change-M2 | Decreases. D) M1 | No Change-M2 | No Change. E) M1 | Increase-M2 | No Change. Show Answer Correct Answer: E) M1 | Increase-M2 | No Change. 4. A plan to increase aggregate demand and stimulate the economy A) Contractionary Fiscal Policy. B) Expansionary Monetary Policy. C) Expansionary Fiscal Policy. D) Contractionary Monetary Policy. Show Answer Correct Answer: C) Expansionary Fiscal Policy. 5. Currently, what is U.S. money backed by? A) Frankincense. B) Silver. C) Gold. D) Trust that it is worth something. Show Answer Correct Answer: D) Trust that it is worth something. 6. A country's ..... is the difference between the value of its exports and the value of its imports during a given period. A) Balance of Payments on Goods and Services. B) Balance of Payments on the Current Account. C) Balance of Payments on the Financial Account. D) Balance of Payments Accounts. Show Answer Correct Answer: A) Balance of Payments on Goods and Services. 7. TRUE or FALSE:The ability of a river to break down certain toxic chemicals into less harmful substances is an example of the resource function. A) FALSE. B) TRUE. Show Answer Correct Answer: A) FALSE. 8. A lower real interest rate will A) Increase the loanable funds demand curve. B) Decrease the loanable funds demand curve. C) Increase the dollar amount of loanable funds exchanged but not change the loanable funds demand curve. D) Decrease the dollar amount of loanable funds exchanged but not change the loanable funds demand curve. Show Answer Correct Answer: C) Increase the dollar amount of loanable funds exchanged but not change the loanable funds demand curve. 9. Which one of the following best describes how an initial change in expenditure leads to a larger impact upon the level of national income? A) The multiplier effect. B) Cost-push inflation. C) Fiscal policy. D) The accelerator process. Show Answer Correct Answer: A) The multiplier effect. 10. The LM curve reflects equilibrium in the ..... market. A) Textile. B) Money. C) Money. D) Capital. Show Answer Correct Answer: B) Money. 11. Which of the following groups has the most control in a command economy? A) Consumers. B) The government. C) Charities. D) Private companies. Show Answer Correct Answer: B) The government. 12. The choice of method for calculating national income depends on A) Availability of data. B) Expertism for calculation. C) Availability of data, expertism of data and level of economy. D) Non of above. Show Answer Correct Answer: C) Availability of data, expertism of data and level of economy. 13. If net investment is positive then: A) The nation's capital stock will shrink. B) The nation's PP curve will shift to the right. C) Gross investment is less than depreciation. D) The nation's current production point will move inside its PP curve. Show Answer Correct Answer: B) The nation's PP curve will shift to the right. 14. The total amount of money that the government owes through the buildup of deficits. A) Treasury bonds. B) Tresaury bills. C) Budget deficit. D) National debt. Show Answer Correct Answer: D) National debt. 15. Ceteris paribus, the quantities of money people are willing and able to hold A) Decrease as interest rates fall. B) Increase as interest rates fall. C) Increase as the money supply decreases. D) Decrease when the speculative demand increases. Show Answer Correct Answer: B) Increase as interest rates fall. 16. An example of a macroeconomic policy question would be "Can goverments promote long-run economic growth" ? A) False. B) True. Show Answer Correct Answer: B) True. 17. Assuming the reserve requirement is 20 percent and commercial banks have no excess reserves initially, the commercial banking system could increase the money supply by a maximum of $ 1, 000, 000 if the Federal Reserve Banks would A) Buy $ 250, 000 of securities from commercial banks. B) Buy $ 200, 000 of securities from commercial banks. C) Buy $ 1, 000, 000 of securities from commercial banks. D) Sell $ 1, 000, 000 of securities to commercial banks. E) Sell $ 200, 000 of securities to commercial banks. Show Answer Correct Answer: C) Buy $ 1, 000, 000 of securities from commercial banks. 18. What is the relationship between aggregate demand and aggregate supply? A) Aggregate supply is determined by aggregate demand. B) Aggregate demand is determined by aggregate supply. C) Aggregate demand and aggregate supply have no relationship. D) The relationship between aggregate demand and aggregate supply determines the equilibrium level of output and price level in an economy. Show Answer Correct Answer: D) The relationship between aggregate demand and aggregate supply determines the equilibrium level of output and price level in an economy. 19. In writing the government budget, most of the budget pays for government entitlements which cannot be changed. A) False. B) True. Show Answer Correct Answer: B) True. 20. Which answer below is something that the Central Bank does NOT do? A) Increase/decrease reserve requirement. B) Buy/sell bonds. C) Increase/decrease interest rate. D) Increase/decrease income tax rates. Show Answer Correct Answer: D) Increase/decrease income tax rates. 21. Keynes' theory of demand for savings is related to which variable below? A) Household income. B) Interest rate. C) Foreign exchange rates. D) All the points are correct. Show Answer Correct Answer: B) Interest rate. 22. What term best describes the total demand for final goods and services at a range of price levels during a stated period of time? A) Aggregate Supply. B) Total Supply. C) Total Demand. D) Aggregate Demand. Show Answer Correct Answer: D) Aggregate Demand. 23. Open economy model of AD includes A) Capital account transactions. B) Interest rate gap. C) Net exports. D) All of the above. Show Answer Correct Answer: C) Net exports. 24. In fixed exchange rate, when Ringgit currency is overvalued, central bank will be: A) Buy foreign exchange by using foreign reserve asset in Malaysia. B) Sell foreign exchange by using foreign reserve asset in foreign. C) Sell foreign exchange by using foreign reserve asset in Malaysia. D) Buy foreign exchange by increasing the money supply. Show Answer Correct Answer: A) Buy foreign exchange by using foreign reserve asset in Malaysia. 25. Statement which describes the world as it is A) Utility. B) Normative statement. C) Sunk cost. D) Positive statement. Show Answer Correct Answer: D) Positive statement. 26. Match the following description with the factor that impacts growth in developing nations:Some countries enforce strict gender roles while don't permit women to work or go to school. A) Geography and Natural Resources. B) History and Government. C) Investments in Human Capital. D) Cultural Beliefs and Religion. Show Answer Correct Answer: D) Cultural Beliefs and Religion. 27. Percentage of income paid in taxes remains the same at all income levels. A) Individual income tax. B) Progressive tax. C) Proportional tax. D) Regressive tax. Show Answer Correct Answer: C) Proportional tax. 28. Collective bargaining is the process of unions and government to agree on the terms of employment A) False. B) True. Show Answer Correct Answer: A) False. 29. National debt is different than deficits in that A) Deficits only apply to monetary decisions made by Congress . B) Deficits include all debts owed over time with interest. C) National debt is the sum of all past deficits plus interest. D) The debt only includes money owed for the current fiscal year. Show Answer Correct Answer: C) National debt is the sum of all past deficits plus interest. 30. Which of these is NOT a principal factor that shifts the demand curve? A) Changes in tastes. B) Changes in number of customers. C) Changes in inventory. D) Changes in income. Show Answer Correct Answer: C) Changes in inventory. ← 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