This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 25 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 25 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Suppose the economy is initially in long-run equilibrium. Then suppose there is a drought that destroys much of the wheat crop. According to the model of aggregate demand and aggregate supply, what happens to prices and output in the short run? A) Prices rise; output falls. B) Prices fall; output rises. C) Prices rise; output rises. D) Prices fall; output falls. Show Answer Correct Answer: A) Prices rise; output falls. 2. If the government increases taxes on consumers, AD will? A) Remain unchanged. B) Stays the same. C) Increase. D) Decrease. Show Answer Correct Answer: D) Decrease. 3. Unemployment generally ..... during recessions and ..... during expansions. A) Falls; rises. B) Falls; falls. C) Rises; falls. D) Rises; rises. Show Answer Correct Answer: C) Rises; falls. 4. Suppose real GDP increases. We can conclude without double that A) Prices are higher. B) Employment is higher. C) Production is higher. D) Prices and output are greater. E) Unemployment is lower. Show Answer Correct Answer: C) Production is higher. 5. When the central bank increases the money supply rapidly it will lead to A) Deflation. B) No effect. C) Inflation. D) Demands for goods and services. Show Answer Correct Answer: C) Inflation. 6. Which of the following statements is true regarding joint ventures: A) Joint-venture arrangements are usually short-term relationships. B) Joint ventures are used only when it is necessary to raise a lot of capital. C) Large corporations are the only business structures that can benefit from joint ventures. D) An independent attorney must always be consulted before signing a joint-venture agreement. Show Answer Correct Answer: A) Joint-venture arrangements are usually short-term relationships. 7. Which one of the following is NOT a supply side policy? A) The government increasing competition in all industries. B) The government reducing import controls. C) The government investing in training and education. D) The government privatising national industries. Show Answer Correct Answer: B) The government reducing import controls. 8. Expenditures on ..... comprise the largest component of state and local government budgets. A) Education. B) Public safety. C) Public infrastructure (such as roads and water works). D) Public welfare (such as food stamps and income supplemental programs). Show Answer Correct Answer: A) Education. 9. Which of the following issues would a macroeconomist concentrate on A) The achievement of full employment. B) The profits of Proton national cars. C) The market for housing in country. D) The price of durians Musang King. Show Answer Correct Answer: A) The achievement of full employment. 10. In order to get GNP from GDP we have to add A) NFIA. B) EXPORT. C) NIT. D) DEP. Show Answer Correct Answer: A) NFIA. 11. Which component of the Federal Reserve System holds the most influence in regards to the direction of monetary policy? A) The Board of Governors. B) Congress and the President. C) The 12 District banks. D) The Federal Open Market Committee. Show Answer Correct Answer: D) The Federal Open Market Committee. 12. According to the CIA World Factbook, which of the following nations have a GDP exceeding the United States? A) Spain. B) Turkey. C) Italy. D) Mexico. E) None of the above. Show Answer Correct Answer: E) None of the above. 13. What happen to the trade balance if import is more than export? A) Surplus. B) Deficit. C) Balance. D) None of above. Show Answer Correct Answer: B) Deficit. 14. Saying that net exports are positive is the same as saying that A) There is a capital account surplus. B) There is a current account surplus. C) There is a current account deficit. D) The same weight of goods has been imported as were exported. Show Answer Correct Answer: B) There is a current account surplus. 15. The value of US 1$ has gone down from rs 67 to rs 65. it means that A) Indian rupee has appreciated. B) US dollar has depreciated. C) Both (a) and (b). D) None of these. Show Answer Correct Answer: C) Both (a) and (b). 16. The Phillips curve shows A) It is impossible to reduce unemployment in the long run. B) There is a trade-off between inflation and unemployment in the short run. C) Unemployment may be negative but inflation is always positive. D) Higher levels of unemployment result in higher levels of inflation. Show Answer Correct Answer: B) There is a trade-off between inflation and unemployment in the short run. 17. TRUE or FALSE:The indicator set of the Europe 2020 strategy is an example for a composite indicator of well-being. A) TRUE. B) FALSE. Show Answer Correct Answer: B) FALSE. 18. The occupational mobility of labour increases. Which types of unemployment is this likely to reduce? A) Cyclical and frictional. B) Frictional and structural. C) Structual and cyclical. D) Cyclical, frictional, and instructional. Show Answer Correct Answer: B) Frictional and structural. 19. A business cycle contraction when there is a general slowdown in economic activity A) Expansion. B) Recession. C) Peak. D) Inflation. Show Answer Correct Answer: B) Recession. 20. Fiscal Policy is controlled by whom? A) Central Bank of America. B) The Federal Reserve. C) Congress & the President. D) The Office of Management & Budget. Show Answer Correct Answer: C) Congress & the President. 21. What does the "I" stand for in the expenditures model equation? A) Intermediate goods. B) Inclusive demand. C) Investments. D) Initial Supply. Show Answer Correct Answer: C) Investments. 22. Which of the following government measures is least likely to be employed to slow demand-pull inflation? A) Encouraging new technology. B) Increasing investment incentives. C) Raising interest rates. D) Reducing monopolistic practices. Show Answer Correct Answer: B) Increasing investment incentives. 23. The decisions the Fed makes to manage the money supply and influence the economy. A) Check clearing. B) Reserve requirement. C) Monetary policy. D) Discount rate. Show Answer Correct Answer: C) Monetary policy. 24. Which policy involves the government selling off nationalised firms? A) Reduce trade union power. B) Privatisation. C) Deregulation. D) Encouraging competition. Show Answer Correct Answer: B) Privatisation. 25. Assume that the velocity of money in Theopolis is 3 and the aggregate supply curve is vertical at $ 100 million.What impact will an increase in the money supply have on real output? A) Real output will increase by 3/10%. B) Real output will increase by 3%. C) Real output will increase by 10%. D) Real output will increase by 30%. E) There will be no impact on real output. Show Answer Correct Answer: E) There will be no impact on real output. 26. Which of the following is not the part of profit? A) Royalty. B) Undistributed profit. C) Dividend. D) Corporate tax. Show Answer Correct Answer: A) Royalty. 27. What does CD stand for when talking about investments? A) Calculated Dividend. B) Certificate of Deposit. C) Current Deposit. D) Central Dollar. Show Answer Correct Answer: B) Certificate of Deposit. 28. The United Nations recently called for governments to stop the $ 5 trillion dollars they give to oil companies every year. This would likely cause a drop in the supply of oil products like gasoline. Which determinant of supply does this illustrate? A) Change in technology. B) Government taxes/ subsidies. C) Complements. D) Worker productivity/ motivation. Show Answer Correct Answer: B) Government taxes/ subsidies. 29. Gross domestic product or GDP is defined as? A) The total dollar value of intermediate goods and services produced in an economy in a given time period. B) The total dollar value of final goods and services produced in the economy in a given time period. C) The total dollar value of wages paid to producing workers in a given time period. D) The total dollar value of government production in a given time period. Show Answer Correct Answer: B) The total dollar value of final goods and services produced in the economy in a given time period. 30. A sudden crash in the stock market shifts A) The aggregate-demand curve. B) The short-run aggregate-supply curve, but not the long-run aggregate-supply curve. C) The long-run aggregate-supply curve, but not the short-run aggregate-supply curve. D) Both the short-run and the long-run aggregate-supply curves. Show Answer Correct Answer: A) The aggregate-demand curve. ← 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