This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 23 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 23 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Suppose that the marginal propensity to consume is 0.9. What is the tax multiplier for a lump sum tax in this case? A) -9. B) -90. C) -100. D) -10. E) -0.1. Show Answer Correct Answer: A) -9. 2. The book General theory of Employment, Interest and Money was written by A) Adam Smith. B) Samuelson. C) J M Keynes. D) Ricardo. Show Answer Correct Answer: C) J M Keynes. 3. The LRPC is vertical because A) There is no tradeoff between inflation and unemployment. B) There is no tradeoff between price level and GDP. C) There is no tradeoff between price and quantity demanded. D) There is no tradeoff between two production options. Show Answer Correct Answer: A) There is no tradeoff between inflation and unemployment. 4. The federal reserve oversees how many district banks? A) 13. B) 25. C) 12. D) 24. Show Answer Correct Answer: C) 12. 5. Which of the following does not related to an expanding economy? A) Increase in income tax rate. B) Population growth. C) Increase in savings. D) Technological progress. Show Answer Correct Answer: A) Increase in income tax rate. 6. An economic system in which major economic decisions are made based on the free choices of consumers and producers, with little government involvement, is: A) Market Economy. B) Traditional Economy. C) Command Economy. D) None of the Above. Show Answer Correct Answer: A) Market Economy. 7. These are government spending and taxation rules that cause fiscal policy to be automatically expansionary when the economy contracts and automatically contractionary when the economy expands. A) Automatic Stabilizers. B) Static Stabilizers. C) Auto-Expand Auto-Contract Policy. D) None of above. Show Answer Correct Answer: A) Automatic Stabilizers. 8. The branches of the subject Economics is A) Wealth and welfare. B) Production and consumption. C) Demand and supply. D) Micro and macro. Show Answer Correct Answer: D) Micro and macro. 9. If a worker's nominal wage rate increases from $ 10 to $ 12 per hour and at the same time the general price levelincreases by 10 percent, the worker's real wage has A) Approximately decreased by 10%. B) Approximately decreased by 20%. C) Approximately increased by 10%. D) Not changed. E) Approximately increased by 20%. Show Answer Correct Answer: C) Approximately increased by 10%. 10. An increase in aggregate demand is likely to lead to A) Demand-push inflation. B) Cost-push inflation. C) Demand-pull inflation. D) Cost-pull inflation. Show Answer Correct Answer: C) Demand-pull inflation. 11. Reserve deposit ratio (rr) = A) R/D. B) D/C. C) D/R. D) C/D. Show Answer Correct Answer: A) R/D. 12. Which of the following is an example of discretionary fiscal policy? A) Income tax payments grow. B) Congress spends an extra $ 2 billion to provide jobs. C) Fewer workers receive unemployment compensation. D) More people apply for and receive welfare benefits. Show Answer Correct Answer: B) Congress spends an extra $ 2 billion to provide jobs. 13. One way the buyers and sellers interact to determine market clearing price is that A) Buyers seek the highest price while sellers seek the lowest price. B) Buyers seek the lowest price while sellers seek the highest price. C) Buyers and sellers each seek the lowest price. D) Buyers and sellers each seek the highest price. Show Answer Correct Answer: B) Buyers seek the lowest price while sellers seek the highest price. 14. A ..... (thrift) is another type of deposit-taking bank, usually specialized in issuing home loans. A) Savings and Loan. B) Commercial. C) Investment. D) Central. Show Answer Correct Answer: A) Savings and Loan. 15. The quantity theory of money is expressed by the identity equation:* A) MxV/PxY. B) M=PxVxY. C) MxV=PxY. D) MxV=Y. Show Answer Correct Answer: C) MxV=PxY. 16. Who owns the resources in the Circular Flow Matrix in a free market? A) Businesses. B) Households. C) Government. D) None of above. Show Answer Correct Answer: B) Households. 17. To promote good economic outcomes, policymakers should strive to enact policies that A) Enhance productivity. B) Enhance individuals' market power. C) Result in a rapidly-growing quantity of money. D) Result in less international trade. E) All of the above. Show Answer Correct Answer: A) Enhance productivity. 18. Use information in the following table to answer questions #12-#14. Production Possibilities Alternatives Product A B C D E F Tanks 0 1 2 3 4 5 Autos 1000 950 850 650 350 0Given the PP schedule, a combination of 3 tanks and 350 autos: A) Illustrates the tradeoff between tanks and autos when resources are fully and efficiently employed. B) Is attainable but involves the inefficient use of some of society's resources. C) Cannot be produced by society, given its current resources and technology. D) Is neither desirable nor attainable. Show Answer Correct Answer: B) Is attainable but involves the inefficient use of some of society's resources. 19. To increase Aggregate Supply we shift the AS curve to the A) Left over. B) Right. C) Left. D) Other right. Show Answer Correct Answer: B) Right. 20. What is the economy's production function? A) Y=K/L. B) Y=f(L, K, R). C) Y=f(L, T, R). D) Y=f(L, R). Show Answer Correct Answer: B) Y=f(L, K, R). 21. Normal goods vs inferior goods A) "money wage" = money you're paid by an employer for your labor. not adjusted for inflation. B) Normal Good = good for which higher income increases demandExamples Ipods, TV, anything considered nice or of good qualityInferior Good = good for which higher income decreases demandExamples:generic brands, 2nd hand goods, anything considered cheap or of lowerquality. C) The most desirable alternative given up as the result of a decision. D) A simplified representation that is used to study a real situation is called:. Show Answer Correct Answer: A) "money wage" = money you're paid by an employer for your labor. not adjusted for inflation. 22. There is an increase in supply. This will cause the equilibrium price to ..... & the equilibrium quantity to ..... A) Decrease; increase. B) Increase; decrease. C) Decrease; decrease. D) Increase; increase. Show Answer Correct Answer: A) Decrease; increase. 23. Goods and services were directly exchanged for other goods and services in ..... A) Economic system. B) Barter system. C) Monetary system. D) Trade system. Show Answer Correct Answer: B) Barter system. 24. What is the business cycle? A) The expansion and contraction of an economy over time. B) The fluctuation of interest rates in the stock market. C) The rise and fall of consumer spending. D) The increase and decrease of government debt. Show Answer Correct Answer: A) The expansion and contraction of an economy over time. 25. What does GDP stand for and what does it measure? A) Gross Domestic Product-Measures market value of goods and services only produced by a country's overseas residents. B) Gross Domestic Product-Measures market value of all the goods and services produced only by the citizens of a country. C) Gross Domestic Product-Measures market value of all the goods and services produced within a country's borders. D) None of above. Show Answer Correct Answer: C) Gross Domestic Product-Measures market value of all the goods and services produced within a country's borders. 26. Cold weather destroys 90% of Florida's orange harvest, this will effect A) Supply. B) Demand. C) Nothing. D) None of above. Show Answer Correct Answer: A) Supply. 27. ..... is the improvement in labor created by the education and knowledge of members of the workforce. A) Human Capital. B) Physical Capital. C) Technology Capital. D) Labor Capital. Show Answer Correct Answer: A) Human Capital. 28. Unemployed due to a downturn in overall economic activity. If the economy expanded again, these workers would be able to go back to work. A) Cyclical. B) Seasonal. C) Structural. D) Frictional. Show Answer Correct Answer: A) Cyclical. 29. This is a tax on an imported good. A) Gift tax. B) Customs duty. C) User fee. D) Estate tax. Show Answer Correct Answer: B) Customs duty. 30. The value a person uses when exchanging goods and services from one country for goods and services from another country can be calculated using the formula..... A) E/(P x P*). B) P*/P. C) E/P*. D) (e x P)/P*. Show Answer Correct Answer: D) (e x P)/P*. ← 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