This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 24 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 24 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Trade policy e.g tariff or quote, under floating exchange rates A) Shifts IS* curve to the rightraises exchange rateincome unchangedNX actually becomes unchanged. B) Shifts IS* curve to the rightraises exchange rateincome unchangedNX increases. C) Shifts IS* curve to the rightraises exchange rateincome unchangedNX decreases. D) Shifts IS* curve to the rightraises exchange rateraises income NX actually becomes unchanged. Show Answer Correct Answer: A) Shifts IS* curve to the rightraises exchange rateincome unchangedNX actually becomes unchanged. 2. Which of the following is the LEAST risky investment? A) Stocks. B) U.S. Treasury bonds. C) Mutual funds. D) Corporate bonds. Show Answer Correct Answer: B) U.S. Treasury bonds. 3. Which one of the following is NOT included in National Income? A) Bonus. B) Old age pension. C) Salary. D) Wages. Show Answer Correct Answer: B) Old age pension. 4. What form/type of tax is characterized by a lower tax rate for lower incomes and a higher tax rate for higher incomes? A) Progressive Tax. B) Regressive Tax. C) Proportional Tax. D) None of above. Show Answer Correct Answer: A) Progressive Tax. 5. Production possibilities curve A) Producing in a way that best uses all of the economy's resources. B) The amount of a good or service that a firm is willing and able to supply at a given price. C) A graph that describes the maximum amount of one good that can be produced for every possible level of production of the other good. D) The actual amount of a good or service consumers are willing to buy at some specific price. Show Answer Correct Answer: C) A graph that describes the maximum amount of one good that can be produced for every possible level of production of the other good. 6. When the government spends more money than it collects in taxes then it is said to be running a: A) Budget Deficit. B) Balanced Budget. C) National Debt. D) Budget Surplus. Show Answer Correct Answer: A) Budget Deficit. 7. The rate of unemployment with price stability is termed as A) Natural unemployment. B) Frictional unemployment. C) Hyper-inflation. D) Disguised unemployment. Show Answer Correct Answer: A) Natural unemployment. 8. Which approach is used to calculate GDP by adding up consumer spending, investment, government spending, exports, and imports? A) Income Approach. B) Gross Value of Output Approach. C) Value-Added Approach. D) Expenditures Approach. Show Answer Correct Answer: D) Expenditures Approach. 9. The first step to take in measuring inflation is to a. A) Find the average price of representative goods. B) Find the percentage change in the monthly price level. C) Select a market basket. D) Convert the dollar cost of representative goods to an index value. Show Answer Correct Answer: C) Select a market basket. 10. Which person would be a loser in an inflationary economy? A) Retiree who lives solely on a fixed social security income. B) Someone with a low fixed interest rate on a loan. C) A saver with a savings account interest rate that's higher than the inflation rate. D) A small business that has a 3-year fixed rate lease on an office space. Show Answer Correct Answer: A) Retiree who lives solely on a fixed social security income. 11. It is the ability of the peso to purchase goods and services. A) CPP. B) PPI. C) CPI. D) PPP. Show Answer Correct Answer: D) PPP. 12. Accounting of National Income at constant prices is known as ..... A) Domestic income. B) Money income. C) Real income. D) Current income. Show Answer Correct Answer: C) Real income. 13. The American Dollar bill is an example of A) Commodity Currency. B) Public Currency. C) Fiat Currency. D) Representative Currency. Show Answer Correct Answer: C) Fiat Currency. 14. Temporary unemployment or being between jobs. Individuals are qualified workers with transferable skills A) Frictional Unemployment. B) Structural Unemployment. C) Cyclical Unemployment. D) None of above. Show Answer Correct Answer: A) Frictional Unemployment. 15. Was a fear that banks would fail and led people to rush them to withdraw their money. A) Bank panic. B) Check clearing. C) Reserve requirement. D) Interest rate. Show Answer Correct Answer: A) Bank panic. 16. If unemployment rate is increasing and GDP is decreasing, the fiscal policy that could be implemented that would be best would be ..... A) Decreasing the IORB. B) Decreasing taxes. C) Increasing spending. D) Decreasing spending. Show Answer Correct Answer: C) Increasing spending. 17. The majority of the Federal Budget is what type of spending? A) Discretionary. B) Mandatory. C) Presidential. D) Congressional. Show Answer Correct Answer: B) Mandatory. 18. The component of overall unemployment that results directly from cycles of economic upturn and downturn (inflation/ unstable markets) A) Cyclical unemployment. B) Structural unemployment. C) Frictional unemployment. D) Seasonal unemployment. Show Answer Correct Answer: A) Cyclical unemployment. 19. The downward slope of a demand curve A) Represents the law of demand. B) Shows that as the price of a good rises, consumers increase the quantity they demand. C) Indicates how the quantity demanded changes when incomes rise and the good is a normal good. D) Indicates how demand changes when incomes rise and the good is a normal good. Show Answer Correct Answer: A) Represents the law of demand. 20. True or False.The 12-year-old Lisa works with her parent's supervision is considered as part of the labor force. A) False. B) True. Show Answer Correct Answer: A) False. 21. If an economy always has inflation of 10 percent per year, which of the following costs of inflation will it NOT suffer? A) Shoeleather costs from reduced holdings of money. B) Menu costs from more frequent price adjustment. C) Distortions from the taxation of nominal capital gains. D) Arbitrary redistributions between debtors and creditors. Show Answer Correct Answer: D) Arbitrary redistributions between debtors and creditors. 22. If the federal government is attempting to encourage spending by consumers and businesses, a fiscal policy BEST serving this purpose would be A) Decreasing taxes. B) Decreasing government spending. C) Balancing the budget. D) Reducing the investment tax credit. Show Answer Correct Answer: A) Decreasing taxes. 23. For an aggregate supply and demand graph, the Y-Axis (vertical) should be labeled which way? A) Price. B) Quantity. C) Real GDP. D) Price level. Show Answer Correct Answer: D) Price level. 24. Printing money and distributing it to all people is not a viable solution to heal world-wide poverty because ..... A) We cannot afford to print that much money. B) It would result in inflation. C) It would result in unemployment. D) Money will be spent on imported goods. Show Answer Correct Answer: B) It would result in inflation. 25. What do we call the most famous measure of how consumers feel about the economy? A) Consumer Confidence Index. B) Consumers Purchasing Power Index. C) Consumer Price Index. D) Consumer Sentiment Index. E) Consumer Parity Index. Show Answer Correct Answer: A) Consumer Confidence Index. 26. The action by the Central Bank to adjust the size of the money supply, and to adjust interest rates in order to keep prices down and employment high refers to A) Fiscal policy. B) Monetary policy. Show Answer Correct Answer: B) Monetary policy. 27. Amount of money originally borrowed A) Annual percentage rate (APR). B) Finance company. C) Principal. D) Mortgage. Show Answer Correct Answer: C) Principal. 28. Fiscal spending can increase the overall stimulus in the economy if the same funds are spent by several people. This is called the ..... effect. A) Supply side. B) Keynsian economics. C) Implementation lag. D) Multiplier. Show Answer Correct Answer: D) Multiplier. 29. ..... us an economic model illustrating the flow of goods & services among economic agents. A) Circular flow diagram. B) Economic circular diagram. C) Simple economic diagram. D) CFD of a Macroeconomy. E) Diagram of a circular ecnomy. Show Answer Correct Answer: A) Circular flow diagram. 30. The concept that people may decide what and when they want to buy and sell goods & services A) Voluntary exchange. B) Legal equality. C) Private property. D) Open opportunity. Show Answer Correct Answer: A) Voluntary exchange. ← 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