This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 169 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 169 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. In a fractional reserve banking system ..... A) Banks do not change the money supply. B) Bank runs are not a critical concern. C) Banks may loan out all or some of their customers' deposits. D) Banks must keep all of their customers' deposits in a secure vault. Show Answer Correct Answer: C) Banks may loan out all or some of their customers' deposits. 2. Stock prices are going down in a: A) Soft market. B) Peak market. C) Bull market. D) Bear market. Show Answer Correct Answer: D) Bear market. 3. Assume that milk is an inferior good.Assuming all other factors remain constant, if the income of milk buyers increases, what will happen to the equilibrium price and quantity of milk? A) We cannot determine what happens to price, but quantity will increase. B) Price will decrease and quantity will increase. C) Price will decrease and quantity will decrease. D) Price will increase, but we cannot determine what happens to quantity. E) Price will increase and quantity will decrease. Show Answer Correct Answer: C) Price will decrease and quantity will decrease. 4. Security and defense expenditure fall under A) Operating expenditure. B) Development expenditure. C) Operational and development expenditure. D) None of the above. Show Answer Correct Answer: B) Development expenditure. 5. The smallest fraction of bank deposits a bank is required by the central bank to hold A) Mortgage insurance. B) Capital requirement. C) Reserve ratio. D) Deposit assurance. Show Answer Correct Answer: C) Reserve ratio. 6. The following are things that can be affected by the size produced by the GDP deflator..... A) CPI Rate Differences. B) Change in Nominal GDP. C) Differences in Inflation Rates. D) Price of Imported Goods. Show Answer Correct Answer: C) Differences in Inflation Rates. 7. Which type of economic policy encourages the nation's economic goals through the use of government spending and taxation? A) Monetary. B) Fiscal. Show Answer Correct Answer: B) Fiscal. 8. Which is an example of government spending? A) Housing. B) Road Construction. C) Food. D) Clothes. Show Answer Correct Answer: B) Road Construction. 9. All of the following is part of the business cycle except ..... A) Inflation. B) Contraction. C) Expansion. D) Peak. E) Trough. Show Answer Correct Answer: A) Inflation. 10. The consumption basket used to calculate the CPI changes every year. A) Lie. B) True. Show Answer Correct Answer: A) Lie. 11. What is the slope of consumption function? A) APS. B) MPC. C) MPS. D) APC. Show Answer Correct Answer: B) MPC. 12. The total supply of goods and service available in the economy. A) Aggregate supply. B) Aggregate demand. Show Answer Correct Answer: A) Aggregate supply. 13. What is a decrease in output that occurs due to the under-utilization or misuse of resources? (Z.G.) A) Contraction. B) Productivity. C) Economic aggregates. D) Inefficient use of resources. Show Answer Correct Answer: A) Contraction. 14. Adam Smith was one of the most famous economists. A) True. B) False. Show Answer Correct Answer: A) True. 15. Increase in business tax and regulations will result in aggregate supply curve shift to the ..... A) Right. B) Left. C) No changes. D) None of above. Show Answer Correct Answer: B) Left. 16. An increase or a decrease in quantity demanded due to a change in the relative price of the replacement product A) Marginal utility. B) Substitute. C) Substitute effect. D) Income effect. Show Answer Correct Answer: C) Substitute effect. 17. The tools of macroeconomics are A) Demand and supply. B) Aggregate demand and aggregate supply. C) Aggregate Savings and aggregate investment. D) Both B and C. Show Answer Correct Answer: D) Both B and C. 18. Which of the following is MOST LIKELY to increase when the Federal Reserve makes an open market purchase? A) The unemployment rate. B) The discount rate. C) The nation's money supply. D) The federal budget deficit. Show Answer Correct Answer: C) The nation's money supply. 19. "Crowding in" refers to ..... A) Reduced government spending that encourages more intended investment. B) A reduction in the availability of private capital. C) Increased government spending that improves macroeconomic expectations. D) Printing more currency to boost aggregate expenditure. E) None of these. Show Answer Correct Answer: C) Increased government spending that improves macroeconomic expectations. 20. Which of the following transactions will be included in the calculation of Country X's Gross Domestic Product (GDP) in 2020? A) The sale of corporate stocks. B) The exchange of a used automobile for a used boat. C) The purchase of new construction equipment. D) Social Security checks received by retirees. E) Carrots grown in a household's backyard and consumed by the family. Show Answer Correct Answer: C) The purchase of new construction equipment. 21. What is the vertical line called on the AD/AS Model? A) Short-run aggregate supply. B) Aggregate demand. C) Long run aggregate supply. D) R GDP. Show Answer Correct Answer: C) Long run aggregate supply. 22. Which result occurs when federal government expenditures are greater than the federal government's total receipts? A) A federal budget surplus. B) Increased excise taxes. C) Reduced net exports. D) A federal budget deficit. Show Answer Correct Answer: D) A federal budget deficit. 23. What are endogenous variables in an economic model? A) Variables that determine the equilibrium price. B) Variables that come from outside the model. C) Variables that determined by its variables within the model. D) Variables that determine the equilibrium quantity. Show Answer Correct Answer: C) Variables that determined by its variables within the model. 24. Suppose the population of the European Union is 500 million people. Of these, Eurostat classifies 120 million people as "not surveyed, " 130 million people as not in the labor force, and 230 million as employed. What would be the unemployment rate in this example? A) 0.04. B) 0.06. C) 0.02. D) 0.1. E) 0.08. Show Answer Correct Answer: E) 0.08. 25. Fiscal policy aims to influence the economic activity through the use of A) Money supply and interest rate. B) Exchange rate. C) Government spending and taxation. D) Direct and indirect taxation. Show Answer Correct Answer: C) Government spending and taxation. 26. The Federal Reserve Bank ("The Fed") is a system of 12 regional banks which helps determine monetary policy and banking regulation. A) True. B) False. Show Answer Correct Answer: A) True. 27. Which of the following is NOT a goal of Monetary and Fiscal Policy? A) Minimize unemployment. B) Increase GDP. C) Stabilize inflation. D) Decrease GDP. Show Answer Correct Answer: D) Decrease GDP. 28. According to the quantity theory of money, changes in which variable(s) from the equation of exchange determine(s) the rate of inflation in the long run? A) Y only. B) V only. C) Y and V. D) M only. E) P only. Show Answer Correct Answer: D) M only. 29. Which of the following is the best measure of a nation's standard of living? A) Nominal GDP. B) Inflation. C) Real GDP per capita. D) Unemployment. Show Answer Correct Answer: C) Real GDP per capita. 30. The Fed can ..... interest rates to help stop inflation A) Even out. B) Raise. C) Decrease. D) Both increase and decrease. Show Answer Correct Answer: B) Raise. ← 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