This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 20 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 20 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. How many consecutive quarters of negative GDP is considered to be a recession? A) 2. B) 3. C) 6. D) 4. Show Answer Correct Answer: A) 2. 2. If the price index in year A is 130, this means that: A) Prices in year A are on average 13 times that in the base year. B) Prices in year A are on average 130 percent higher than in the base year. C) Prices in year A are on average 30 percent higher than in the base year. D) Nominal GDP is 130 percent higher than real GDP in year A. Show Answer Correct Answer: C) Prices in year A are on average 30 percent higher than in the base year. 3. A system to make financial loss more affordable by transferring it from individuals to large groups is called: A) Investing. B) Trading. C) Insurance. D) Saving. Show Answer Correct Answer: C) Insurance. 4. The idea that relatively poor nations should have higher rates of growth of real GDP per capita than relatively rich nations is known as the ..... A) East Asian miracle. B) Industrial Revolution. C) Malthusian hypothesis. D) Convergence hypothesis. E) Sustainable development hypothesis. Show Answer Correct Answer: D) Convergence hypothesis. 5. What is a contraction in the business cycle? A) The accumulation of government deficits over the years. B) The highest point of Real GDP. C) The lowest point of Real GDP. D) The period of falling Real GDP. Show Answer Correct Answer: D) The period of falling Real GDP. 6. A higher unemployment rate could be the result of ..... A) Lower consumer spending. B) Oversupply of goods. C) Low inflation. D) Increased consumer spending. Show Answer Correct Answer: A) Lower consumer spending. 7. A recession is best described as a situation with: A) Falling economic activity and rising cyclical unemployment. B) Weak employment growth but rises in job vacancies. C) Increases in overtime and participation rates. D) Rising cost push inflation and a falling GDP. Show Answer Correct Answer: A) Falling economic activity and rising cyclical unemployment. 8. Disposable income come after taxes are taken out. A) True. B) False. Show Answer Correct Answer: A) True. 9. Which of the following is true according to the circular flow model? A) Firms are suppliers in both the product and factor markets. B) Firms are demanders in the product markets and suppliers in the factor markets. C) Households are demanders in both the product and factor markets. D) Households are demanders in the product markets and suppliers in the factor markets. E) The government is a demander in the product market only. Show Answer Correct Answer: D) Households are demanders in the product markets and suppliers in the factor markets. 10. When the government spends more, the initial effect is that A) Aggregate demand shifts right. B) Aggregate demand shifts left. C) Aggregate supply shifts right. D) Aggregate supply shifts left. Show Answer Correct Answer: A) Aggregate demand shifts right. 11. Which of the following is the component of the gross domestic product (GDP) is ..... A) Business expenditures. B) Exports to other countries. C) Government expenditures. D) Consumption expenditures. E) All. Show Answer Correct Answer: E) All. 12. Which of the following is NOT TRUE of GDP? A) It considers the market value of both intermediate and final goods and services. B) It includes the market value of all final goods and services. C) It includes all final goods and services produced in the nation within a set time period. D) Consumer spending is a big factor in the expenditure model of GDP. Show Answer Correct Answer: A) It considers the market value of both intermediate and final goods and services. 13. It ss a statistical measure designed to show changes in a variable or group of related variables (price, quantity, value) with respect to time, geographic location or other characteristics such as income, profession and the like. A) Wholesale price. B) SRP. C) Retail price. D) Index number. Show Answer Correct Answer: D) Index number. 14. Which of the following will lead to long-run economic growth? A) An increase in the production of consumer goods. B) An increase in unemployment. C) An increase in literacy. D) A decrease in nominal wages. Show Answer Correct Answer: C) An increase in literacy. 15. A general rise in the price level of products is known as: A) Inflation. B) Cost-Push phenomenon. C) Hyperinflation. D) Deflation. Show Answer Correct Answer: A) Inflation. 16. An increase in expected inflation is likely to have which of the following effects? A) Shift the long-run Phillips curve to the right. B) Increase the actual inflation rate. C) Shift the short-run aggregate supply curve to the right. D) Shift the short-run Phillips curve downward. E) Decrease the natural employment rate. Show Answer Correct Answer: B) Increase the actual inflation rate. 17. During an economic expansion, Gross Domestic Product (GDP): A) Stays of the same. B) Increases. C) Is not calculated. D) Decreases. Show Answer Correct Answer: B) Increases. 18. John was studying the effects of the recent economic downturn. He noticed a type of unemployment that rises during these downturns and falls when the economy improves. What type of unemployment was John studying? A) Frictional Unemployment. B) Cyclical Unemployment. C) Structural Unemployment. D) Seasonal Unemployment. Show Answer Correct Answer: B) Cyclical Unemployment. 19. Economy does not have tendency to move toward the golden steady state, need a particular saving rate to support it A) True. B) False. Show Answer Correct Answer: A) True. 20. The long-run aggregate supply curve will shift to the right when A) Investment increases. B) Foreign exports increase. C) Government spending increases. D) Consumption increases. Show Answer Correct Answer: A) Investment increases. 21. The United States national debt is A) The amount of money owed by the federal government to United States citizens. B) The amount of money owed by the federal government to other United States government agencies. C) The amount of currency in the hands of foreigners. D) The amount of money owed by state and local governments to United States citizens. E) The amount of money owed to holders of United States government securities. Show Answer Correct Answer: E) The amount of money owed to holders of United States government securities. 22. In trying to achieve one of its aims a government may make it difficult to achieve another aim. What is an example of this conflict? A) Achieving a more even distribution of income may prevent a rise in the average standard of living. B) Achieving an increase in economic growth may prevent full employment. C) Achieving full employment may prevent stable prices. D) Achieving stable prices may prevent a current account surplus on the balance of payments. Show Answer Correct Answer: C) Achieving full employment may prevent stable prices. 23. What is excluded from the calculation of GDP? A) Final goods and services. B) Intermediate goods and transfer payments. C) Foreign-owned firms. D) None of above. Show Answer Correct Answer: B) Intermediate goods and transfer payments. 24. Which of the following is the best way to compare the standard of living among people in different nations? A) GDP per capita. B) Imports and Exports. C) Consumer Price Index. D) Tax bracket. E) GDP. Show Answer Correct Answer: A) GDP per capita. 25. Macroeconomics is A) The study of price increases. B) The study of price decreases. C) The study of the entire economy. D) None of above. Show Answer Correct Answer: C) The study of the entire economy. 26. Which of the following is not a scarce economic resource? A) Labor. B) Capital. C) Human wants. D) Land. E) Natural resources. Show Answer Correct Answer: C) Human wants. 27. Which of the following helps economists better understand a nation's standard of living? A) Net Exports. B) Business Investment. C) Nominal GDP. D) GDP per capita. Show Answer Correct Answer: D) GDP per capita. 28. The resources that are wasted when people change their behavior to avoid holding money. A) Money illusion. B) Menu Costs. C) Capital gains taxes. D) Shoeleather Costs. Show Answer Correct Answer: D) Shoeleather Costs. 29. The total value of all final goods and services is called the A) Business cycle. B) Net export. C) Gross domestic product. D) Consumer price index. Show Answer Correct Answer: C) Gross domestic product. 30. The recurrent ups and downs in the level of economic activity extending over several years are referred to as: A) Business startups. B) Noncyclical fluctuations. C) Economic phases. D) Business cycles. Show Answer Correct Answer: D) Business cycles. ← 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