This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 147 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 147 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. An ..... is a limit on the quantity of a good that can be imported within a given period. A) Tariffs. B) Foreign Exchange Controls. C) Import Quota. D) Protectionism. Show Answer Correct Answer: C) Import Quota. 2. This addresses the demand of the consumers. A) Finance. B) Supply. C) Scarcity. D) Production. Show Answer Correct Answer: B) Supply. 3. Which of the following is NOT a component of the M1 money supply in the euro area? A) Checking account deposits. B) Currency in circulation. C) Money market account deposits. D) Travelers checks. E) All of these are components of the M1 money supply. Show Answer Correct Answer: D) Travelers checks. 4. How might reducing taxes on middle-and lower-income citizens help stimulate the economy? A) It will lower the cost to make goods and provide services, enabling businesses to hire more workers. B) It will give people more money to spend, increasing the overall demand for goods and services. Show Answer Correct Answer: B) It will give people more money to spend, increasing the overall demand for goods and services. 5. Macroeconomics distinguishes between the real economy and the A) Monetary economy. B) Underground economy. C) Normative economy. D) Virtual economy. Show Answer Correct Answer: A) Monetary economy. 6. In the circular flow diagram, households earn revenue via the..... market and spend via the..... market. ..... A) Products; resource [item; expense factor]. B) Capital; consumer [capital; user]. C) Resources; product [expenditure factor; goods]. D) Consumer; capital [user; capital]. Show Answer Correct Answer: C) Resources; product [expenditure factor; goods]. 7. This type of fiscal policy is the result of deliberate actions by policy makers rather than rules. A) Discretionary. B) Expansionary. C) Contractionary. D) None of above. Show Answer Correct Answer: A) Discretionary. 8. According to the Reserve Bank of India, what is the tolerance limit for inflation in India based on Consumer Price Index? A) 2% to 6%. B) 3% to 5%. C) 0% to 4%. D) 1% to 5%. Show Answer Correct Answer: A) 2% to 6%. 9. What are the three types of unemployment? A) Frictional, structural, and cyclical. B) Seasonal, technological, and discouraged. C) Involuntary, voluntary, and underemployment. D) Demand-pull, cost-push, and stagflation. Show Answer Correct Answer: A) Frictional, structural, and cyclical. 10. The quantity of goods and services that can be purchased with a given amount of money; the value of money. A) Power. B) Purchasing power. C) Menu cost. D) Nominal interest rate. Show Answer Correct Answer: B) Purchasing power. 11. Which combination of fiscal policies would be the most contractionary? A) An increase in government spending and taxes. B) A decrease in government spending and taxes. C) An increase in government spending and a decrease in taxes. D) A decrease in government spending and an increase in taxes. Show Answer Correct Answer: D) A decrease in government spending and an increase in taxes. 12. The use of taxes and government spending to affect the economy A) Monetary Policy. B) Contractionary Policy. C) Expansionary Policy. D) Fiscal Policy. Show Answer Correct Answer: D) Fiscal Policy. 13. One of the various statistical measures that show the relative stability of an economic system A) Income Taxes. B) GDP. C) Indicators. D) Supply. Show Answer Correct Answer: C) Indicators. 14. Deflation in the domestic economy is most likely to A) Cause consumers to delay their purchases of consumer durables. B) Lead to a rise in interest rates for both borrowers and lenders. C) Lead to a rise in both exports and imports. D) Reduce the real value of any money that has been lent. Show Answer Correct Answer: A) Cause consumers to delay their purchases of consumer durables. 15. A government lowers the rate of interest. Who is most likely to be disadvantaged by this policy? A) Manufacturers. B) Savers. C) House buyers. D) Retailers. Show Answer Correct Answer: B) Savers. 16. The money demand function (M/P)D = 1000-100r. With M = 1000 and P = 2, the real money supply (M/P)S =500. For the Fed to raise the interest rate from 5 percent to 7 percent, the new nominal money supply is A) M=200. B) M=600. C) M=1000. D) M=700. Show Answer Correct Answer: B) M=600. 17. A bank receives a deposit of $ 100, 000. If the reserve requirement ratio is 10%, what is the maximum possible expansion of the money supply? A) $ 100, 000. B) $ 90, 000. C) $ 900, 000. D) $ 10, 000. Show Answer Correct Answer: C) $ 900, 000. 18. Which tool of monetary policy matches this definition:The Federal Reserve began paying interest on bank reserves. If the Fed either raises or lowers interest rates, banks will be compelled to either hold excess reserves or lend them to customers. A) Reserve Requirement. B) Interest on Required and Excess Reserves. C) Discount Rate. D) Open Market Operations. Show Answer Correct Answer: B) Interest on Required and Excess Reserves. 19. What is the desirable unemployment rate according to many economists? A) 4 to 6 percent. B) 10 to 12 percent. C) 1 to 3 percent. D) 7 to 9 percent. Show Answer Correct Answer: A) 4 to 6 percent. 20. What determine the shift in LM curve? A) Increase sensitivity of money demand. B) Decrease sensitivity of money demand. C) Increase in money supply. D) Increase in interest rate. Show Answer Correct Answer: C) Increase in money supply. 21. When aggregate supply equals aggregate demand A) Macroeconomic equilibrium. B) Demand-pull inflation. C) Cost-push inflation. D) FIscal policy. Show Answer Correct Answer: A) Macroeconomic equilibrium. 22. This is a system requiring financial institutions to set aside a fraction of their deposits in the form of reserves or vault cash. A) Reserve requirement. B) Member bank reserves. C) Fractional reserve system. D) Legal reserves. Show Answer Correct Answer: C) Fractional reserve system. 23. Natural resources used in production A) Land. B) Capital. C) Labor. D) Entrepreneurship. Show Answer Correct Answer: A) Land. 24. A government fixes the rate of income tax at $ 0.15 per dollar earned. Which word describes this type of tax? A) Regressive. B) Proportional. C) Progressive. D) Indrect. Show Answer Correct Answer: B) Proportional. 25. An important limitation of monetary policy is that A) It is conducted by people in Congress who are under pressure to get reelected every 2 years. B) When the Fed tries to buy bonds, it is often unable to find a seller. C) When the Fed tries to sell bonds, it is often unable to find a buyer. D) It must be conducted through the commercial banking system, and the Fed cannot always make banks do what it wants them to do. Show Answer Correct Answer: D) It must be conducted through the commercial banking system, and the Fed cannot always make banks do what it wants them to do. 26. The nation of Tupalow is outraged that the Republic of Congo repeatedly violates international human rights laws. As a result, Tupalow decides not to export products to the Republic of Congo until that nation shows evidence that it is obeying such laws. Which best describes the action taken by the nation of Tupalow? A) An embargo was placed on the Republic of Congo. B) An unfavorable balance of trade went to the Nation of Tupalow. Show Answer Correct Answer: A) An embargo was placed on the Republic of Congo. 27. A short-run increase in national income could be caused by a decrease in which of the following? A) Consumption. B) Imports. C) Investment. D) Exports. E) Government spending. Show Answer Correct Answer: B) Imports. 28. The proportion of total income consumed is A) MPS. B) MPC. C) APC. D) APS. Show Answer Correct Answer: C) APC. 29. In an economy, the government reduced its spending by £41bn at the same time as exports rose by £20bn. As a result of these changes, national income rose by £20bn. The size of the multiplier is A) 1. B) 0.75. C) 1.25. D) 1.2. Show Answer Correct Answer: C) 1.25. 30. The Federal Reserve sells bonds to decrease the money supply. What type of policy is this? A) Contractionary Fiscal Policy. B) Contractionary Monetary Policy. C) Expansionary Monetary Policy. D) Expansionary Fiscal Policy. Show Answer Correct Answer: B) Contractionary Monetary Policy. ← 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