This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 150 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 150 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The value of exports of goods and services minus the value of imports of goods and services. A) Gross Domestic Product. B) Net exports of goods and services. C) Investment. D) Nominal GDP. Show Answer Correct Answer: B) Net exports of goods and services. 2. The Federal Reserve can move the interest rate through open-market operations that shift the money supply curve. In practice, the Fed sets a ..... and uses open-market operations to achieve that target. A) Required Federal Funds Rate. B) Federal Funds Rate. C) Target Federal Funds Rate. D) Adjustable Federal Funds Rate. Show Answer Correct Answer: C) Target Federal Funds Rate. 3. What is Central Bank approach to reduce inflation rate in order to achieve the inflation targeting? A) Central Bank will reduce the money supply when there is positive shock in aggregate demand. B) Increase in money supply when there is positive shock in aggregate supply. C) Reducing the interest rate when there is positive shock in aggregate demand. D) All of the above. Show Answer Correct Answer: A) Central Bank will reduce the money supply when there is positive shock in aggregate demand. 4. Quantity equation A) MP=VY. B) MY=PV. C) MV=PY. D) VP=MY. Show Answer Correct Answer: C) MV=PY. 5. ..... are formed with the idea that there's strength in numbers. A) Strikes. B) Union leaders. C) Unions. D) Organizations. Show Answer Correct Answer: C) Unions. 6. According to the Classical labor market model, a minimum wage above the equilibrium wage will result in ..... A) An increase in the size of the labor force. B) A decrease in the number of discouraged workers. C) An increase in unemployment. D) No change in employment. E) An increase in employment. Show Answer Correct Answer: C) An increase in unemployment. 7. Demand-pull inflation is caused by A) A significant increase in the price of an input with economy-wide importance. B) A significant increase in aggregate demand. C) An increase in the price level. D) None of the above. Show Answer Correct Answer: B) A significant increase in aggregate demand. 8. In three sector economy, we do not include the expenditure of ..... A) Government. B) Household. C) External Sector. D) Infrastructure. Show Answer Correct Answer: C) External Sector. 9. Which of the following will occur if the money supply grows faster than the quantity of goods and services in the economy? A) Increased inflation. B) Decreased value of the dollar. C) Fall in real wages for individuals earning a fixed income. D) All of the above. Show Answer Correct Answer: A) Increased inflation. 10. What led to the creation of the Federal Reserve System? A) The stock market crash in 1929. B) The establishment of the Department of Treasury. C) A series of bank panics and failures in the early 1900s. D) The great recession of 2008. Show Answer Correct Answer: C) A series of bank panics and failures in the early 1900s. 11. Is the percentage decrease in the average level of prices A) Inflation rate. B) Rate. C) Deflation rate. D) Percentage. Show Answer Correct Answer: C) Deflation rate. 12. Which task do individuals NOT perform in circular flow? A) Purchasing goods. B) Producing goods. Show Answer Correct Answer: B) Producing goods. 13. In which one of the following situations could the UK be said to be experiencing a negative output gap? A) Output per worker is lower in the Uk than in the USA. B) Real GDP in the UK is less than the economy's productive potential. C) UK firms do not have sufficient productive capacity to satisfy customer demand. D) The skills possessed by UK workers do not match those which are required by UK employers. Show Answer Correct Answer: B) Real GDP in the UK is less than the economy's productive potential. 14. If there is an increase in feed prices what will happen to the supply curve for beef? A) We can not determine. B) A shift to the left. C) A shift to the right. D) There will be no change. Show Answer Correct Answer: B) A shift to the left. 15. If the production technology of a good improves and at the same time the number of consumers willing and able to buy the good in the market increases, which of the following will definitely occur? A) Equilibrium quantity will decrease. B) Equilibrium price will decrease. C) Equilibrium price will increase. D) Equilibrium quantity will remain the same. E) Equilibrium quantity will increase. Show Answer Correct Answer: E) Equilibrium quantity will increase. 16. How can the government use monetary policy to achieve price stability (inflation)? A) By lowering the reserve requirement for banks. B) By selling government securities on the open market. C) By increasing the level of taxation for corporations. D) By decreasing the level of government spending. Show Answer Correct Answer: B) By selling government securities on the open market. 17. Inflation in excess of 500 percent per year is called A) Demand-pull inflation. B) Cost-push inflation. C) Stagflation. D) Hyperinflation. Show Answer Correct Answer: D) Hyperinflation. 18. If the government wanted to offset the effect of a boom in consumer and investor confidence on AD, it might A) Decrease government purchases. B) Decrease taxes. C) Do either (a) or (c). D) Increase taxes. Show Answer Correct Answer: C) Do either (a) or (c). 19. The economy of Isengard is experiencing high inflation and a rate of unemployment below the natural rate.Which of the following combination of fiscal and monetary policy actions would be the most appropriate response to this output gap? A) Increase taxes; buy bonds. B) Increase government spending; decrease taxes. C) Decrease taxes; increase the money supply. D) Decrease government spending; decrease the money supply. E) Buy bonds; decrease the reserve ratio. Show Answer Correct Answer: D) Decrease government spending; decrease the money supply. 20. A country with a population of 100 million people has a labour force of 50 million people. Of these 45 million are working and 5 million do not have a job. What is the unemployment rate in this country? A) 11.1%. B) 10%. C) 5%. D) 5 million. Show Answer Correct Answer: B) 10%. 21. Jen works as a teacher. At the end of each month she puts 20% of her paycheck in her savings account to use to purchase a new car. What conclusion can you make using this example? A) Jen is using money as a unit of account. B) Jen is using money as a store of value. C) Jen is using money as a medium of exchange. D) Jen is using money as a means of deferring payment. Show Answer Correct Answer: B) Jen is using money as a store of value. 22. Which one of the following statements relating to the use of supply-side policy is correct? A) Supply-side policies are designed to reduce the size of the negative output gap. B) Supply-side policies are intended to increase the long-run trend rates of economic growth. C) Supply-side policies ensure increased capacity utilisation in the economy. D) Supply-side improvements in the economy can only be brought about by government policy. Show Answer Correct Answer: B) Supply-side policies are intended to increase the long-run trend rates of economic growth. 23. John recently quit his job to find a new one. This period of job searching is an example of which type of unemployment? A) Structural Unemployment. B) Seasonal Unemployment. C) Cyclical Unemployment. D) Frictional Unemployment. Show Answer Correct Answer: D) Frictional Unemployment. 24. What are the four types of unemployment? A) Frictional, structural, cyclical, and seasonal. B) Voluntary, involuntary, temporary, and permanent. C) Demand-pull, cost-push, technological, and natural. D) Monetary, fiscal, supply-side, and demand-side. Show Answer Correct Answer: A) Frictional, structural, cyclical, and seasonal. 25. The four sector circular flow of income does not include ..... A) World economy. B) Financial Market. C) Dollars. D) Crude oil reserves in oil well. Show Answer Correct Answer: D) Crude oil reserves in oil well. 26. Increase monetary base A) OMO:buy govt bonds to increase quantity of money in circulationdiscount rate:lower the discount rate. B) OMO:buy govt bonds to increase quantity of money in circulationdiscount rate:raise the discount rate. C) OMO:sell govt bonds to decrease quantity of money in circulationdiscount rate:lower the discount rate. D) OMO:sell govt bonds to increase quantity of money in circulationdiscount rate:raise the discount rate. Show Answer Correct Answer: A) OMO:buy govt bonds to increase quantity of money in circulationdiscount rate:lower the discount rate. 27. Which option presents the business cycle in the correct order A) Trough, expansion, peak, contraction. B) Trough, contraction, peak, recovery. C) Peak, expansion, trough, recovery. D) Peak, contraction, recovery, trough. Show Answer Correct Answer: A) Trough, expansion, peak, contraction. 28. Microeconomics can be defined as ..... A) The part of economics concerned with large-scale or general economic factors, such as interest rates and national productivity. B) The study of what is likely to happen (tendencies) when individuals make choices in response to changes in incentives, prices, resources, and/or methods of production. Show Answer Correct Answer: B) The study of what is likely to happen (tendencies) when individuals make choices in response to changes in incentives, prices, resources, and/or methods of production. 29. Expansionary policies are designed to control ..... A) Inflation. B) Deflation. C) Inflation and deflation. D) All of these. Show Answer Correct Answer: B) Deflation. 30. In October, Bill is laid off from his job as a Halloween costume make solely because of a slow Halloween season. Which statement is true? A) Bill is cyclically unemployed. B) Bill is frictionally unemployed. C) Bill is structurally unemployed. D) Bill is seasonally unemployed. Show Answer Correct Answer: A) Bill is cyclically unemployed. ← 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