This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 2 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Ceteris Paribus, or "all other things held constant" is an assumption that has which of the following effects on a demand schedule. A) It takes ONLY price into account. B) It considers the effects of all possible changes on demand. C) It is accurate no matter what changes occur. D) It is accurate only at one price level. Show Answer Correct Answer: A) It takes ONLY price into account. 2. During a recession, which of the following is likely to occur? A) An increase in real wages. B) An increase in production. C) And increase in the GDP growth rate. D) An increase in the unemployment rate. Show Answer Correct Answer: D) An increase in the unemployment rate. 3. When foreign interest rate higher than domestic interest rate, what is the consequences? A) Domestic residents will buy foreign assets. B) Foreign residents will buy assets. C) Foreign residents will buy domestic assets. D) Domestic residents will buy domestic assets. Show Answer Correct Answer: A) Domestic residents will buy foreign assets. 4. With the economy in a recession because of inadequate aggregate demand, the government increases its purchases by $ 1, 200. Suppose the central bank adjusts the money supply to hold the interest rate constant, investment spending is fixed, and the marginal propensity to consume is 2/3. How large is the increase in aggregate demand? A) $ 1, 800. B) $ 3, 600. C) $ 800. D) $ 400. Show Answer Correct Answer: B) $ 3, 600. 5. These are from dollar remittances and these are sold to the central bank for pesos through commercial banks based on a fixed exchange rate prescribed. A) Rediscounting. B) Government securities. C) Balance of trade. D) Foreign currency inflaws. Show Answer Correct Answer: D) Foreign currency inflaws. 6. Businesses provide government with ..... A) Sales. B) Private goods & services. C) Taxes. D) Interest. Show Answer Correct Answer: C) Taxes. 7. A stock variable: A) Has no time dimension. B) Is a static concept. C) Both (a) and (b). D) None of these. Show Answer Correct Answer: C) Both (a) and (b). 8. If Congress increases government spending by the same amount it increases taxes aggregate demand will A) Remain the same. B) Decrease, these are both contractionary. C) Increase. D) Shift down. Show Answer Correct Answer: C) Increase. 9. Coach Russo pays a tax each year of $ 3500 that is based off the value of his family's home. Which type of tax is he paying? A) Sales Tax. B) Income Tax. C) Property Tax. D) Payroll Tax. Show Answer Correct Answer: C) Property Tax. 10. When there is too much money in the economy, what happens during an inflation period? A) Purchasing power goes down, it costs more to buy goods and services. B) Purchasing power goes down, it costs less to buy goods and services. C) Purchasing power goes up, it costs more to buy goods and services. D) Purchasing power goes up, it costs less to buy goods and services. Show Answer Correct Answer: A) Purchasing power goes down, it costs more to buy goods and services. 11. What is the definition of inflation? A) An increase in the general level of prices for goods and services. B) A decrease in the general level of prices for goods and services. C) An increase in the supply of money. D) A decrease in the supply of money. Show Answer Correct Answer: A) An increase in the general level of prices for goods and services. 12. Assume the velocity of money and real gross domestic product are constant. According to the quantity theory of money, an increase in the money supply will result in which of the following? A) An increase in the money multiplier. B) A decrease in nominal gross domestic product. C) A decrease in the money multiplier. D) A decrease in the price level. E) An increase in the price level. Show Answer Correct Answer: E) An increase in the price level. 13. The sum total of the value of all the goods and services produced in a nation A) Revenue. B) Cash. C) Gross domestic product (GDP). D) Exports. Show Answer Correct Answer: C) Gross domestic product (GDP). 14. How do policymakers usually respond to a crisis such as the Global Financial Crisis of 2008 and the COVID-19 crisis of 2020-2021 so that the economy can recover from it? A) Reduce Money Supply through reduction in interest rate. B) Increase Money Supply through increase in interest rate. C) Reduce Money Supply through increase in interest rate. D) Increase Money Supply through reduction in interest rate. Show Answer Correct Answer: D) Increase Money Supply through reduction in interest rate. 15. Which of this is NOT a type of economic system? A) Foreign economy. B) Planned economy. C) Free Market economy. D) Mixed Economy. Show Answer Correct Answer: A) Foreign economy. 16. All other things being equal, an increase in the exchange rate of the pound against other currencies due to a rise in interest rates is most likely to cause an increase in the UK's A) Rate of economic growth. B) Price of imported goods. C) Level of unemployment. D) Surplus on the current account of the balance of payments. Show Answer Correct Answer: C) Level of unemployment. 17. ..... are spending promises made by governments that are effectively a debt despite the fact that they are not included in the usual debt statistics. A) Implicit Liabilities. B) Risk. C) Government Debt. D) Liabilities. Show Answer Correct Answer: A) Implicit Liabilities. 18. Reduce birth rate. A) Preventive check. B) Birth control. C) Positive check. D) Population control. Show Answer Correct Answer: A) Preventive check. 19. Classification of goods depends upon the ..... A) Consumption of goods. B) First-use of goods. C) End-use of goods. D) Production of goods. Show Answer Correct Answer: C) End-use of goods. 20. What are some examples of human resources? A) Truck, building, container, computer. B) Starting a business for profit. C) Doctor, Engineer, Teacher, Worker. D) Trees, cows, oil, water, rocks, minerals. Show Answer Correct Answer: C) Doctor, Engineer, Teacher, Worker. 21. How do mutual funds make money for their investors? A) Capital Appreciation and Dividends. B) Dividends only. Show Answer Correct Answer: B) Dividends only. 22. Which of the following is NOT a source of revenue for state and local governments? A) Taxes on exports. B) Property taxes. C) Court fines. D) Income taxes. Show Answer Correct Answer: A) Taxes on exports. 23. Which of the following would be considered unemployed? A) A recent college graduate looking for a job. B) A stay-at-home parent. C) A 14-year-old student who babysits for extra cash. D) A retired grandmother. Show Answer Correct Answer: A) A recent college graduate looking for a job. 24. Which would most likely occur during a period of recession? A) Real gross domestic output falls. B) Unemployment rate falls. C) Production increase. D) Personal income increases. Show Answer Correct Answer: A) Real gross domestic output falls. 25. How does the central bank use the reserve requirement as a tool of monetary policy? A) By decreasing the reserve requirement to decrease the money supply. B) By decreasing the reserve requirement to increase the money supply. C) By increasing the reserve requirement to increase the money supply. D) By increasing the reserve requirement to decrease the money supply. Show Answer Correct Answer: D) By increasing the reserve requirement to decrease the money supply. 26. Who among the following would be considered as unemployed? A) A housewife taking care of three children. B) A secretary who was laid-off from work & is looking at job ads. C) An entrepreneur in the process of starting a new business. D) A college student of legal age to work but who is still in school full time. Show Answer Correct Answer: B) A secretary who was laid-off from work & is looking at job ads. 27. Forests are examples of ..... A) Land. B) Labor. C) Entrepreneurs. D) Capital. Show Answer Correct Answer: A) Land. 28. Factor services rendered by the households to the firms lead to: A) Real flow. B) Services flow. C) Money flow. D) Both (a) and (c). Show Answer Correct Answer: A) Real flow. 29. A country's iron industry closed down, as buyers switch their purchases of iron to another country, what type of unemployment will occur as a result of this? A) Cyclical. B) Structural. C) Frictional. D) Seasonal. Show Answer Correct Answer: B) Structural. 30. What is liquidity? A) Karl Marx. B) Availability of liquid assets in a market. C) The ocean. D) Water. Show Answer Correct Answer: B) Availability of liquid assets in a market. ← PreviousNext →Related QuizzesEconomics QuizzesFinance QuizzesMacroeconomics Quiz 1Macroeconomics Quiz 3Macroeconomics Quiz 4Macroeconomics Quiz 5Macroeconomics Quiz 6Macroeconomics Quiz 7Macroeconomics Quiz 8Macroeconomics Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books