This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 28 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 28 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. You hear another student say: "Fiscal policy is easy to understand, all you have to know is what is happening with current tax rates!" This student is A) Correct because that is the definition of fiscal policy. B) Incorrect because he is describing monetary policy. C) Partially correct because he needs to include government spending decisions as well. D) Partially correct because he needs to include open market operations as well. Show Answer Correct Answer: C) Partially correct because he needs to include government spending decisions as well. 2. Consumption of domestically produced goods and services plus injections (Cd + J) is known as: A) National expenditure. B) Total consumption. C) Aggregate supply. D) Aggregate income. Show Answer Correct Answer: A) National expenditure. 3. An economics system in which economic decisions and the pricing of goods and services are guided by the interactions of a country's individual citizens and businesses. A) Market Economy. B) Traditional Economy. C) Mixed Economy. D) Command Economy. Show Answer Correct Answer: A) Market Economy. 4. The liquidity continuum ..... A) Refers to how easy it is to use an asset as a store of value. B) Suggests a share of stock is more liquid than precious metal. C) Is used to argue that checking accounts are not liquid enough to belong in the M1 measure of the money supply. D) Argues that credit cards are a relatively "liquid" form of money. E) None of these statements is accurate. Show Answer Correct Answer: B) Suggests a share of stock is more liquid than precious metal. 5. Pollution is a result of the manufacturing process of some products. Therefore, when calculating real GDP ..... A) Pollution should be considered and repaired. B) Should be enhanced by including the cost of cleaning up pollution in the future. C) Tend to overestimate economic well-being. D) Tend to underestimate economic well-being. Show Answer Correct Answer: C) Tend to overestimate economic well-being. 6. Unemployment resulting from industrial reorganization, typically due to technological change, rather than fluctuation in supply or demand A) Seasonal unemployment. B) Structural unemployment. C) Cyclical unemployment. D) Frictional unemployment. Show Answer Correct Answer: B) Structural unemployment. 7. Which of the following is an example of contractionary fiscal policy? A) Decreasing government spending. B) Decreasing taxes. C) Selling government bonds on the open market. D) Increasing the reserve requirement. Show Answer Correct Answer: A) Decreasing government spending. 8. Which one of the following is an injection into the circular flow of income? A) Personal income tax. B) Imports. C) Business tax. D) Government purchases of factor services. Show Answer Correct Answer: D) Government purchases of factor services. 9. An economy is in macroeconomic equilibrium. If Y = 200, C =100, I =30, G=40 and M =30, what is the value of exports? A) 90. B) 80. C) 60. D) 40. Show Answer Correct Answer: C) 60. 10. Supply side policies are often centred on A) Raising inflation. B) Changing the base rate of interest. C) Investing in capital-human and infrastructure. D) Changing laws. Show Answer Correct Answer: C) Investing in capital-human and infrastructure. 11. What is the formula to calculate the unemployment rate? A) Number of employed individuals / Labor force * 100. B) Number of unemployed individuals / Number of employed individuals * 100. C) Number of unemployed individuals / Labor force * 100. D) Number of unemployed individuals / Total population * 100. Show Answer Correct Answer: C) Number of unemployed individuals / Labor force * 100. 12. Which of the following groups of people would benefit from unanticipated inflation? I Savers II Borrowers III Lenders A) I only. B) II only. C) III only. D) I and II only. E) I and III only. Show Answer Correct Answer: B) II only. 13. Imagine a country where the government determines all production, investment, prices, and incomes. What type of economy is this? A) Market Economy. B) Mixed Economy. C) Traditional Economy. D) Command Economy. Show Answer Correct Answer: D) Command Economy. 14. A price index determined by measuring the price of a standard group of goods meant to represent the market basket of a typical urban consumer. A) Inflation. B) Consumer Price Index. C) Unemployment. D) Gross Domestic Product. Show Answer Correct Answer: B) Consumer Price Index. 15. Which change is most likely to reduce total demand? A) A reduction in government tax revenue. B) A reduction in imports. C) An increase in savings. D) An increase in investment. Show Answer Correct Answer: C) An increase in savings. 16. The cost of collection should be as small as possible A) Convenience canon of taxation. B) Equity canon of taxation. C) Certainty canon of taxation. D) Economy canon of taxation. Show Answer Correct Answer: D) Economy canon of taxation. 17. How are monetary policy and fiscal policy similar? A) They are both done by the President. B) They are both done by the Fed. C) They are both used to keep the economy stable. D) They both use four tools. Show Answer Correct Answer: C) They are both used to keep the economy stable. 18. Increase in investment demand A) Investment demand curve shifts right. B) Investment demand curve shifts left. C) S curve shifts right. D) R increases. Show Answer Correct Answer: A) Investment demand curve shifts right. 19. If the marginal propensity to consume (MPC) is 0.9, what is the maximum amount that the equilibrium gross domestic product could change if government expenditures increase by $ 1 billion? A) It could increase by $ 9 billion. B) It could increase by $ 10 billion. C) It could increase by $ 0.9 billion. D) It could increase by $ 1 billion. E) It could decrease by $ 9 billion. Show Answer Correct Answer: B) It could increase by $ 10 billion. 20. To find GDP per capita A) You divide GDP by the population in that country. B) You multiply GDP and population. C) You multiply exports with imports. D) None of above. Show Answer Correct Answer: A) You divide GDP by the population in that country. 21. GDP gauges the number of voluntary economic transactions that occur in a nation, which is good indication of ..... A) Interest rates. B) The effects of free trade agreements. C) Citizens' overall well-being. D) Money supply. Show Answer Correct Answer: C) Citizens' overall well-being. 22. An economy where economics decisions are passed down from government authority and where the government owns the resources A) Command economy. B) Market economy. C) Labor market. D) Market. Show Answer Correct Answer: A) Command economy. 23. The study of how the allocation of resources affects economic well being. A) Externality. B) Welfare economics. C) Willingness to pay. D) None of above. Show Answer Correct Answer: B) Welfare economics. 24. Too little capital:k* A) Increase saving rate to increase kC reduces for current and increases for future; increase I; increase output. B) Decrease saving rate to increase kC reduces for current and increases for future; increase I; increase output. C) Increase saving rate to decrease kC reduces for current and increases for future; increase I; increase output. D) Increase saving rate to increase kC increases; increase I; increase output. Show Answer Correct Answer: A) Increase saving rate to increase kC reduces for current and increases for future; increase I; increase output. 25. Portfolio investment ..... A) Refers to the purchase of financial assets such as stocks and bonds. B) Was historically only available to wealthy individuals. C) Is viewed as another form of savings by economists. D) Both (a) and (b) are correct but (c) is incorrect. E) All three of (a), (b), and (c) are accurate statements. Show Answer Correct Answer: E) All three of (a), (b), and (c) are accurate statements. 26. Olivia volunteers full time at an animal shelter and will not accept any offers for a paid job for the next six months. Olivia is A) Cyclically unemployed. B) Not in the labor force. C) Employed. D) Structurally unemployed. E) A seasonal worker. Show Answer Correct Answer: B) Not in the labor force. 27. How is a decrease in the price of a good illustrated on a demand graph? A) The demand curve shifts to the right. B) The demand curve shifts to the left. C) There is upward movement along the demand curve. D) There is downward movement along the demand curve. Show Answer Correct Answer: D) There is downward movement along the demand curve. 28. Which type of economic system is it when the government decides what to produce, the government decides how to produce, and the government decides who gets the goods produced? A) Traditional. B) Command. C) Market. D) Mixed. Show Answer Correct Answer: B) Command. 29. In the Mundell-Fleming model, the exogenous variables are the: A) World interest rate, the price level, and the exchange rate. B) Level of government spending, taxes, and income. C) Exchange rate and level of income. D) Price level, world interest rate, monetary policy, and fiscal policy. Show Answer Correct Answer: D) Price level, world interest rate, monetary policy, and fiscal policy. 30. Which approach is the most important way to measure GDP? A) Expenditures approach. B) Income approach. C) Value-added approach. D) All approaches are equally important. Show Answer Correct Answer: A) Expenditures approach. ← 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