This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 21 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 21 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. If the government decreases spending or raises taxes, it is implementing a(n) ..... policy A) Expansionary fiscal. B) Contractionary fiscal. C) Contractionary monetary. D) Expansionary monetary. Show Answer Correct Answer: B) Contractionary fiscal. 2. One role monetary policy is to control ..... by changing the ..... A) The price level; government spending. B) Inflation ; price level. C) Inflation; quantity of money in circulation. D) Unemployment; level of taxation. Show Answer Correct Answer: C) Inflation; quantity of money in circulation. 3. Which phase of the business cycle would the Federal Reserve most likely use a "tight money" policy to deal with the issue of inflation? A) Expansion phrase. B) Peak phrase. Show Answer Correct Answer: B) Peak phrase. 4. The ..... is the small bussiness EX.house hold firm A) Microeconomics. B) Macroeconomics. Show Answer Correct Answer: A) Microeconomics. 5. What is percent change in prices over a specific time period? A) APR. B) Inflation. C) GDP. D) Price Indices. Show Answer Correct Answer: B) Inflation. 6. If the demand for Wendy's increases when the price of Starbucks decreases, then what type of goods are Wendy's and Starbucks? A) Complements. B) Normal. C) Inferior. D) Substitutes. Show Answer Correct Answer: A) Complements. 7. How many Federal Reserve districts are included in the Federal Reserve System? A) 10. B) 8. C) 6. D) 12. Show Answer Correct Answer: D) 12. 8. Which of the following expenditures would be counted as investment towards the United States' gross domestic product (GDP)? A) A European airplane manufacturer builds a new assembly plant outside of Atlanta, Georgia. B) The US government spends $ 1 billion on a new interstate highway. C) Ford Motor Company builds a new factory in Mexico. D) A Wall Street investment bank purchases a large number of shares in a young Silicon Valley tech company. Show Answer Correct Answer: A) A European airplane manufacturer builds a new assembly plant outside of Atlanta, Georgia. 9. What is most likely to cause economic growth? A) A better educated workforce. B) A reduction in the right to own property. C) Decreased wages. D) Higher taxation. Show Answer Correct Answer: A) A better educated workforce. 10. When does the US government operate with a budget deficit? A) When the government spends less than it generates in revenue. B) When the government spends more than it generates in revenue. C) When the United States imports more goods and services than it exports. D) When the United States exports more goods and services than it imports. Show Answer Correct Answer: B) When the government spends more than it generates in revenue. 11. Who pays interest when you deposit money in the bank? A) The depositor. B) The bank. Show Answer Correct Answer: B) The bank. 12. The level of wealth achieved by a society A) Standard of Living. B) Safety Net. C) Factors of Production. D) Intellectual Property. Show Answer Correct Answer: A) Standard of Living. 13. The study of how society manages its scare resources A) Money studies. B) Finance. C) GDP. D) Economics. Show Answer Correct Answer: D) Economics. 14. Promote economic growth2. Limit unemployment3. Keep prices stable (limit inflation) A) Factors of productivity. B) Major Economic Goals for Every Country. C) Income approach adds up. D) Components of GDP. Show Answer Correct Answer: B) Major Economic Goals for Every Country. 15. Which of the following could explain the shift shown in the graph below? A) A beneficial supply shock. B) An increase in investor confidence. C) A lowering of people's expectations of inflation. D) A decrease in government spending. E) A lowering of the ECB's target inflation rate. Show Answer Correct Answer: B) An increase in investor confidence. 16. If aggregate demand and real GDP decrease and unemployment increases, what conclusion can you draw A) The economy is in recovery. B) Aggregate supply is increasing. C) The economy is in expansion. D) The economy is facing a slow down. Show Answer Correct Answer: D) The economy is facing a slow down. 17. Goods that last fewer than 3 years A) Non-Durable Goods. B) Intermediate Goods. C) Durable Goods. D) Final Goods. Show Answer Correct Answer: A) Non-Durable Goods. 18. Which government policy measure is most likely to benefit people on high income? A) Increasing housing benefit. B) Increasing unemployment benefit. C) Reducing government expenditure on higher education. D) Reducing income tax. Show Answer Correct Answer: D) Reducing income tax. 19. It shows the cycle of goods and services in an economy. A) Circular flow of goods. B) Circular flow of the economy. C) Circular flow of money. D) Circular flow of resources. Show Answer Correct Answer: B) Circular flow of the economy. 20. What does GDP stand for in economics? A) General Domestic Product. B) Gross Domestic Product. C) Government Development Plan. D) Global Demand and Production. Show Answer Correct Answer: B) Gross Domestic Product. 21. T/F:Even with full employment, a nation will likely still have frictional and structural unemployment. A) False. B) True. Show Answer Correct Answer: B) True. 22. All other things being equal, an increase in aggregate demand would result from an increase in the A) Deficit in the current account of the balance of payments. B) Household saving ratio. C) Ratio of household consumption to national income. D) Government's budget surplus. Show Answer Correct Answer: C) Ratio of household consumption to national income. 23. When consumers purchase imported products, this is: A) Double counting. B) Subtracted from GDP. C) Considered domestic spending since it is spent by a domestic consumer. D) Not a part of the GDP calculation. Show Answer Correct Answer: B) Subtracted from GDP. 24. Which of these terms is used to describe a company's ability to produce a good at a lower opportunity cost than another company? A) Absolute advantage. B) Comparative advantage. C) Trade imbalance. D) Non-structural barrier. Show Answer Correct Answer: B) Comparative advantage. 25. Gains in trade arise from A) A decrease in the input price for production. B) The knowledge and skills that workers acquire through education, training, and experience. C) Each additional unit produced means amounts of the other good (which are ever-increasing) must be given up. D) Specialization in production. Show Answer Correct Answer: D) Specialization in production. 26. Addition of spending to the income-expenditure system. A) Saving. B) Injection. C) Import. D) Leakage. Show Answer Correct Answer: B) Injection. 27. Which of these supply-side policies is not aimed primarily at increasing competition in an economy? A) Industrial policy. B) Trade liberalization. C) Privatization. D) Deregulation. Show Answer Correct Answer: A) Industrial policy. 28. What are the major risks for bond investors? A) Default. B) Inflation. C) Interest Rate Changes. D) Inflation and Interest Rate Changes. Show Answer Correct Answer: D) Inflation and Interest Rate Changes. 29. Which of the following best describes aggregate supply? A) A schedule indicating the level of real output that will be produced at each possible price level. B) A schedule indicating the level of real output that will be purchased at each possible price level. C) A schedule showing the trade-off between inflation and unemployment. D) A schedule showing the relationship between inputs and outputs. Show Answer Correct Answer: A) A schedule indicating the level of real output that will be produced at each possible price level. 30. Money that is given for a specific purpose with the aggreement that it will be paid back. A) Fiat Money. B) Commodity Money. C) Loan. D) Specie Money. E) Interest. Show Answer Correct Answer: C) Loan. ← 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