This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 15 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 15 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The limited nature of society's resources A) Scarcity. B) Economics. C) Efficiency. D) None of above. Show Answer Correct Answer: A) Scarcity. 2. What is an action of monetary policy? A) Increase spending. B) Borrow money for deficit. C) Changing reserve requirements. D) Reduce taxes. Show Answer Correct Answer: C) Changing reserve requirements. 3. What is a government budget surplus? A) When the amount of income received by the government exceeds the amount of expenses paid by the government. B) When the amount of expenses paid by the government exceeds the amount of income received by the government. C) When the government has no income or expenses. D) When the government has equal income and expenses. Show Answer Correct Answer: A) When the amount of income received by the government exceeds the amount of expenses paid by the government. 4. According to the interest rate effect, aggregate demand slopes downward (negatively) because A) Lower prices increase money holdings, decrease lending, interest rates rise, and investment spending falls. B) Lower prices increase the value of money holdings and consumer spending increases. C) Lower prices decrease the value of money holdings and consumer spending decreases. D) Lower prices reduce money holdings, increase lending, interest rates fall, and investment spending increases. Show Answer Correct Answer: D) Lower prices reduce money holdings, increase lending, interest rates fall, and investment spending increases. 5. Russia exports wheat. In 2010, a bad harvest led the Russian government to prevent the export of wheat, to ensure enough supplies were kept for domestic use. What was the most likely outcome of the government's action? A) The amount produced was determined by the government. B) Prices were fixed by the wheat producers. C) The price of wheat abroad fell. D) There was a redistribution of domestic production. Show Answer Correct Answer: D) There was a redistribution of domestic production. 6. Takes a larger share of one's income as the amount of income grows is A) Tax. B) Tax Evasion. C) Proportional Taxes. D) Progressive Taxes. Show Answer Correct Answer: D) Progressive Taxes. 7. A Japanese car company makes a new sedan in Kentucky. Which country's GDP is this added to? A) U.S. B) Japan. C) U.S. and Japan. D) China. E) No answer. Show Answer Correct Answer: A) U.S. 8. If 20-30 percent of new college graduates in the US spend their first few years after graduation underemployed, then which of the following would be TRUE? A) The current production point of the US would move closer to its PP curve. B) The US PP curve would shift to the right. C) The current production point of the US would move further away from its PP curve. D) The US PP curve would shift to the left. Show Answer Correct Answer: C) The current production point of the US would move further away from its PP curve. 9. Which of the following are injections into the circular flow of income? A) Household spending, wages and rent. B) Government spending, investment and imports. C) Savings, capital and exports. D) Investment, government spending and exports. Show Answer Correct Answer: D) Investment, government spending and exports. 10. Unemployed because they are graduating from high school or college, looking for better working conditions, or seeking a higher wage. A) Cyclical. B) Seasonal. C) Frictional. D) Structural. Show Answer Correct Answer: C) Frictional. 11. It is show as macroeconomics, except ..... A) Unemployment. B) Income. C) Economic growth. D) Inflation. Show Answer Correct Answer: B) Income. 12. This describes services the government is obligated to provide. Examples include public safety (police, fire), education, parks and recreation, social security, and infrastructure. A) Tariffs. B) Imports. C) Entitlements. D) Exports. E) Subsidies. Show Answer Correct Answer: C) Entitlements. 13. How would a balanced budget amendment affect a decision by Congress to grant a tax cut during a recession? A) It would make it more difficult for Congress to grant a tax cut during a recession. B) It would have no impact on Congress' decision to grant a tax cut during a recession. C) It would lead to an automatic tax cut during a recession. D) It would make it easier for Congress to grant a tax cut during a recession. . Show Answer Correct Answer: A) It would make it more difficult for Congress to grant a tax cut during a recession. 14. Unemployment that relates to the regular ups and downs, or trends in growth and production, that occur within the business cycle A) Structural Unemployment. B) Seasonal Unemployment. C) Frictional Unemployment. D) Cyclical Unemployment. Show Answer Correct Answer: D) Cyclical Unemployment. 15. Which of the following occurs as the economy moves leftward along a given IS curve? A) An increase in the interest rate causes investment spending to decrease. B) An increase in the interest rate causes money demand to increase. C) An increase in the interest rate causes a reduction in the money supply. D) A reduction in government spending causes a reduction in demand for goods. Show Answer Correct Answer: A) An increase in the interest rate causes investment spending to decrease. 16. The United States National Debt is best explained as the ..... A) Amount of money owed by the federal government to US citizens. B) Amount of US currency in the hands of foreigners. C) Amount of money owed by the state and local governments to US citizens. D) Amount of money owed to holders of US government securities (treasury bonds). Show Answer Correct Answer: D) Amount of money owed to holders of US government securities (treasury bonds). 17. Gross domestic product includes: A) All goods and services. B) Newly produced foreign goods as well as used goods. C) Used goods sold in the current time period. D) Only the values of final goods and services. Show Answer Correct Answer: D) Only the values of final goods and services. 18. A woman who lost her job due to a decrease in sales during a recession in the economy is ..... A) Frictionally unemployed. B) Structurally unemployed. C) Cyclically unemployed. D) Seasonally unemployed. Show Answer Correct Answer: C) Cyclically unemployed. 19. The production possibilities frontier is a graph that shows a various combinations of output that an economy A) Should produce. B) Wants to produce. C) Can produce. D) Demands. E) Supplies. Show Answer Correct Answer: C) Can produce. 20. When government policies are being designed: A) There is usually a tradeoff between equity and efficiency. B) Equity and efficiency goals are usually independent of each other. C) Equity can usually be achieved without an efficiency loss. D) Increasing efficiency usually results in more equity. Show Answer Correct Answer: A) There is usually a tradeoff between equity and efficiency. 21. If a governmental policy decreases AD, then in the short run demand will ..... A) Decrease and unemployment will rises. B) Stay the same and unemployment will fall. C) Decrease and unemployment will stay the same. D) Decrease and unemployment will decrease. Show Answer Correct Answer: A) Decrease and unemployment will rises. 22. Why do economists want slight amounts of inflation to happen very predictably? A) Unexpected inflation is bad. B) Consumers and firms can plan for the future. C) Consumers and firms are rather unpredictable. D) Deflation is bad. Show Answer Correct Answer: B) Consumers and firms can plan for the future. 23. Which kind of monetary policy would you expect in response to high inflation:expansionary or contractionary? A) Expansionary. B) Contractionary. Show Answer Correct Answer: B) Contractionary. 24. In the short run if the price of imported Brazilian lumber used in buildings increases ..... A) AS shifts right. B) AD shifts left. C) AS shifts left. D) AD shifts right. Show Answer Correct Answer: C) AS shifts left. 25. The federal requirement to keep a certain percentage of money at the bank is know as the ..... A) Discount rate. B) Prime (interest ) rate. C) Reserve requirement (rate, ratio). D) Mutual fund. Show Answer Correct Answer: C) Reserve requirement (rate, ratio). 26. Money that can be directly use for transactions is A) Broad money. B) M2. C) M1. D) Near money. Show Answer Correct Answer: C) M1. 27. Imagine a scenario where a country's economy is booming, industries are flourishing, and there is a surge in job opportunities. This is followed by a sudden downturn, industries start to collapse, and unemployment rises. What is this phenomenon called? A) Equilibrium. B) GDP. C) Circular Flow. D) Business Cycle. Show Answer Correct Answer: D) Business Cycle. 28. An increase in the money supply will A) Reduce interest rates and increase aggregate demand. B) Reduce interest rates and decrease aggregate demand. C) Raise interest rates and increase aggregate demand. D) Raise interest rates and decrease aggregate demand. Show Answer Correct Answer: A) Reduce interest rates and increase aggregate demand. 29. Which of the following measure of welfare focuses on people and their capabilities to access the development and welfare of a country? A) Gross National Happiness Index. B) Gross Domestic Product. C) Social Progress Index. D) Human Development Index. Show Answer Correct Answer: D) Human Development Index. 30. Increase in the stock of capital is known as: A) Capital loss. B) Capital gain. C) Capital formation. D) Both b and c. Show Answer Correct Answer: C) Capital formation. ← 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