This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 17 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 17 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What is being out of the labor force? A) Currently working for pay. B) Out of work and not actively looking for a job. C) Out of work and currently looking for a job. D) The number of employed and unemployed. Show Answer Correct Answer: B) Out of work and not actively looking for a job. 2. The multiplier effect is based on the fact that ..... by one person is (are) ..... to another A) Expenditures; expenditures. B) Expenditures; income. C) Income; expenditures. D) Income; income. Show Answer Correct Answer: B) Expenditures; income. 3. When making a decision, the next best alternative is called A) The production possibilities. B) Scarcity. C) The opportunity cost. D) The absolute advantage. E) Efficiency. Show Answer Correct Answer: C) The opportunity cost. 4. What does Government Spending refer to in macroeconomics? A) Spending by individuals and households. B) Spending by businesses on investments. C) Spending by the government on public goods and services. D) Spending by foreign countries on domestic goods. Show Answer Correct Answer: C) Spending by the government on public goods and services. 5. Which of the following government policies will help the economy to recover from inflation A) A decrease in the cash reserves requirements. B) The purchase of government securities in the open market. C) A decrease in the discount rate. D) The selling of government securities in the open market. Show Answer Correct Answer: D) The selling of government securities in the open market. 6. " prices rise when the quantity of money rise rapidly" Is an example of a A) Negative economic statement. B) Positive economic statement. C) Normative economic statement. D) Statement that contradicts one of the basic principles of economics. E) Economic fallacy. Show Answer Correct Answer: B) Positive economic statement. 7. At what point in the business cycle is GDP the highest? A) Recovery. B) Expansion. C) Trough. D) Peak. Show Answer Correct Answer: D) Peak. 8. At the existing price, the quantity demanded exceeds the quantity supplied; also called excess demand A) Shift in supply. B) Shortage. C) Substitute. D) Surplus. Show Answer Correct Answer: B) Shortage. 9. Unemployment that results from search time required to find new employment after leaving a previous position is known as? A) Frictional. B) Cyclical. C) Seasonal. D) Structural. Show Answer Correct Answer: A) Frictional. 10. Too much money printed can lead to A) Unemployment. B) Deflation. C) Inflation. D) Increase output. Show Answer Correct Answer: C) Inflation. 11. As income increases, consumption will ..... A) Fall. B) Not change. C) Fluctuate. D) Increase. Show Answer Correct Answer: D) Increase. 12. Which of the following finished items is going to have an import tariff on it in the United States? A) A car assembled in Turin, Italy. B) Grapes grown in Delano, California. C) Computer chips made in Chandler, Arizona. D) A plane assembled in Everett, Washington. Show Answer Correct Answer: A) A car assembled in Turin, Italy. 13. A nonprofit hospital in Brussels would be classified into which sectorin the European Union's national accounting conventions? A) The household and non-profit institutions sector. B) The government sector. C) The "rest of the world" sector. D) The nonfinancial corporations sector. E) The financial corporations sector. Show Answer Correct Answer: A) The household and non-profit institutions sector. 14. Which one of the following categories defined Eurostat contains the fewest number of people? A) Individuals not surveyed by Eurostat. B) Individuals not in the labor force. C) Individuals in the labor force. D) Employed individuals. E) Unemployed individuals. Show Answer Correct Answer: E) Unemployed individuals. 15. A worker earns $ 250 each week, which leaves a disposable income of $ 175. What will affect the real value of the worker's $ 250 earned income? A) A change in the tax rate. B) A change in interest rates. C) A change in government spending. D) A change in the price level. Show Answer Correct Answer: D) A change in the price level. 16. An indicator and concept that measures quality of life in a more holistic psychological and emotional terms. A) Gross Domestic Product GDP. B) Consumer Price Index CPI. C) Social Progress Index SPI. D) Gross National Product GNP. Show Answer Correct Answer: C) Social Progress Index SPI. 17. If the government's fiscal policy is designed to expand the economy, which action would Congress be MOST likely to take? A) Buy government bonds. B) Increase income. C) Raise the discount rate. D) Increase government spending. Show Answer Correct Answer: D) Increase government spending. 18. Which of the following is true about tariffs? A) They increase the market for imports and exports. B) They decrease employment in protected industries. C) They benefit some groups at the expense of others. D) They encourage the growth of the most efficient industries. Show Answer Correct Answer: C) They benefit some groups at the expense of others. 19. When the price level rises, nominal GDP can be lower than real GDP. A) True. B) Lie. Show Answer Correct Answer: B) Lie. 20. If the economy is expanding too quickly, the Federal Reserve will institute which type of monetary policy? A) Expansionary. B) Contractionary. C) Equanimitous. D) Whole Dollar. Show Answer Correct Answer: B) Contractionary. 21. ..... is the minimum amount of cash that is required for commercial banks to keep in the central bank. A) Selective credit control. B) Open market operations. C) Legal cash reserve requirements. D) Discount rate or bank rate. Show Answer Correct Answer: C) Legal cash reserve requirements. 22. These are all macroeconomics objectives except ..... A) Full employment. B) Economic growth. C) Technology improvement. D) Income equitability distribution. Show Answer Correct Answer: C) Technology improvement. 23. In a small open economy with a floating exchange rate, if the government imposes a tariff on foreign goods, then in the new short-run equilibrium: A) Imports will decrease while exports remain constant, leading to a rise in net exports. B) Imports will decrease and exports will increase, leading to a rise in net exports. C) Imports will decrease and exports will decrease by an equal amount. D) Both imports and exports will remain unchanged. Show Answer Correct Answer: C) Imports will decrease and exports will decrease by an equal amount. 24. Contractionary fiscal policy would most likely be used during ..... A) Recessions. B) Times where economy is operating at full employment. C) Periods of sustained, demand pull inflation. D) Anytime we have a negative GDP gap. Show Answer Correct Answer: C) Periods of sustained, demand pull inflation. 25. The study of how a whole country's economy works, like looking at the big picture is known as "Interest Rates." A) True. B) False. Show Answer Correct Answer: B) False. 26. T/F:The purchase of a newly built home is in the Investment component of GDP. A) False. B) True. Show Answer Correct Answer: B) True. 27. According to the federal government's 2015 Intergenerational Report, the number of older Australians is expected to double as a percentage of the population by 2054-55.Which one of the following is not a negative factor caused by the anticipated ageing of the population that could slow future rates of economic growth? A) A decrease in the labour force participation rate. B) An increase in demand for places in aged care facilities. C) An increase in government expenditure on medical services. D) An increase in government expenditure on the Age Pension. Show Answer Correct Answer: B) An increase in demand for places in aged care facilities. 28. Which of the following fiscal policy will be used in Recession phase? A) Expansionary fiscal policy. B) Contractionary fiscal policy. Show Answer Correct Answer: A) Expansionary fiscal policy. 29. In the textbook presentation of 'How Banks Create Money', which of these is NOT true? A) When banks make loans they increase the money supply. B) Banks need to obtain new reserves before they can make a loan. C) Banks can decide to hold more reserves than the required reserves. D) Banks are legally obligated to hold a minimum of reserves known as required reserves. E) All of these statements are accurate. Show Answer Correct Answer: B) Banks need to obtain new reserves before they can make a loan. 30. There are several arguments as to why the Aggregate Demand curve is downward sloping, including all of these EXCEPT ..... A) The interest rate effect. B) The inflation rate effect. C) The wealth effect. D) The international trade effect. Show Answer Correct Answer: B) The inflation rate effect. ← 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