This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 3 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Calculate the gross domestic private investment:Durable goods 30Non durable goods 15Residential 20Services 17Non residential 54Depreciation 34Change in inventories 12 A) 136. B) 86. C) 74. D) 119. Show Answer Correct Answer: B) 86. 2. If the economy was going into a recession, what would the Federal government do with taxes? A) Increase them. B) Do nothing. C) Decrease them. D) None of above. Show Answer Correct Answer: C) Decrease them. 3. In order to control inflation, the FED could ..... the money supply. A) Decrease. B) Increase. Show Answer Correct Answer: A) Decrease. 4. Which of the following is an expansionary Fiscal Policy measure? A) Decrease in government spending. B) Increase in government spending. C) Decrease in transfer payments. D) Increase in taxes. Show Answer Correct Answer: B) Increase in government spending. 5. Which monetary policy tool would speed up the economy? A) Decreasing interest paid on reserves. B) Increasing reserve requirement. C) Decreasing income taxes. D) Increasing government spending. Show Answer Correct Answer: A) Decreasing interest paid on reserves. 6. The actions the Federal Reserve System takes to influence the level of real GDP and the rate of inflation in the economy. A) Fiscal Policy. B) Congressional Policy. C) Executive Policy. D) Monetary Policy. Show Answer Correct Answer: D) Monetary Policy. 7. Deltonia produces both consumer and capital goods. If it reduces the percentage of its current output devoted to capital goods, then: A) Its rate of economic growth will tend to increase. B) Its rate of economic growth will tend to decline. C) Its PPC will shift to the left. D) It must also reduce the percentage of its current output devoted to consumer goods. Show Answer Correct Answer: B) Its rate of economic growth will tend to decline. 8. Which is better for a company? A) Competitive Advantage. B) Absolute Advantage. Show Answer Correct Answer: B) Absolute Advantage. 9. Gross domestic product (GDP) is officially measured by adding together: A) The quantity of each good and service produced by Australian residents. B) Gross national product and depreciation of resources. C) Incomes received by all of a nation's households. D) The market value of all final goods and services produced within the borders of a nation. Show Answer Correct Answer: D) The market value of all final goods and services produced within the borders of a nation. 10. Trading something for something else-no currency involved A) Demand. B) Barter. C) Goods. D) Market. Show Answer Correct Answer: B) Barter. 11. All of the following are positive effects that Globalization has on a country except A) Local manufacturers. B) Improving standards of health. C) Improving standards of education. D) Finding more markets for goods. Show Answer Correct Answer: A) Local manufacturers. 12. The IS-LM model is designed to explain the economy in the short run when the price level? A) Go down. B) Naik. C) Still. D) Adjusted to its natural level. Show Answer Correct Answer: C) Still. 13. Which of these tools is an example of monetary policy? A) Changing reserve requirements. B) Increasing government spending. C) Borrowing through deficit spending. D) Reducing income taxes. Show Answer Correct Answer: A) Changing reserve requirements. 14. An increase in the price of peanut butter will cause the demand curve for jelly to shift in which of the following directions? A) To the right, if jelly is purchased by people with lower incomes and peanut butter is a luxury good for them. B) To the right, if peanut butter and jelly are complementary goods. C) To the left, if peanut butter and jelly are complementary goods. D) To the left, if peanut butter and jelly are substitute goods. Show Answer Correct Answer: C) To the left, if peanut butter and jelly are complementary goods. 15. Tanks and roads belong in which part of the GDP formula? GDP = C+I+G+(X-M) A) Government Expenditures. B) Investment Expenditures. C) Net Imports. D) Consumption Expenditures. Show Answer Correct Answer: A) Government Expenditures. 16. The economy of Mithrim is experiencing a severe recession. As a result, the government is conducting expansionary fiscal policy. The central bank of Mithrim is considering expansionary monetary policy to aid in the recovery efforts.Which of the following is an example of a monetary policy action that would work with the expansionary fiscal policy to close the output gap? A) Increase taxes. B) Selling bonds. C) Open market purchases. D) Increasing government spending. E) Increasing the discount rate. Show Answer Correct Answer: C) Open market purchases. 17. Which of the following actions by the Fed would reduce the money supply? A) An open-market purchase of government bonds. B) A reduction in banks' reserve requirements. C) An increase in the interest rate paid on reserves. D) A decrease in the discount rate on Fed lending. Show Answer Correct Answer: C) An increase in the interest rate paid on reserves. 18. In inflation is a rise in prices A) False. B) True. Show Answer Correct Answer: B) True. 19. In a typical business cycle, what stage immediately follows a PEAK? A) Expansion. B) Growth. C) Trough. D) Contraction. Show Answer Correct Answer: D) Contraction. 20. A progressive tax is a tax that A) Is imposed only on higher income earners. B) Will be the same for all income levels. C) Goes on increasing with income. D) Falls with the increase in income. Show Answer Correct Answer: C) Goes on increasing with income. 21. Assume the Federal Reserve Bank observes very high inflation, extremely low unemployment, and unsustainable growth in the economy. Which monetary policy would the Fed MOST LIKELY take? A) Buy treasury bonds. B) Increase interest on reserves. C) Decrease the discount rate. D) Decrease the reserve requirement. Show Answer Correct Answer: B) Increase interest on reserves. 22. When can an economy be said to be economically inefficient? A) When it is possible to make some people better off without making other people worse off. B) When the distribution of income is socially unacceptable. C) When the government sector is growing at the expense of the private sector. D) When wage rates rise faster than production. Show Answer Correct Answer: A) When it is possible to make some people better off without making other people worse off. 23. If the economy was going into an inflationary period, what would the Federal government do with government spending? A) Increase it. B) Do nothing. C) Decrease it. D) None of above. Show Answer Correct Answer: C) Decrease it. 24. According to the the Philips curve, if the inflation rate increases from 4% to 6%, and if the unemployment rate is 5% when the inflation rate was 4%, we can expect the unemployment rate in the short run to ..... A) Stay the same. B) Increase to 8%. C) Decrease to 3%. D) None of above. Show Answer Correct Answer: C) Decrease to 3%. 25. What if the government offers subsidies to companies to produce more? A) AD decreases. B) AS decreases. C) AS increases. D) AD increases. Show Answer Correct Answer: C) AS increases. 26. With regards to economic growth, what is the goal of an expansionary fiscal policy? A) Increase trade deficits. B) Decrease economic growth. C) Maintain current economic levels. D) Increase economic growth. Show Answer Correct Answer: D) Increase economic growth. 27. If you earn additional $ 500 in disposable income one week for painting your neighbor's house, A) The total of your consumption and saving will increase by more than $ 500. B) The total of your consumption and saving will increase by $ 500. C) The total of your consumption and saving will increase by less than $ 500. D) Your consumption will increase by more than $ 500, even if your MPS is 0.1. Show Answer Correct Answer: B) The total of your consumption and saving will increase by $ 500. 28. A plan to reduce aggregate demand and slow the economy? A) Expansionary Monetary Policy. B) Contractionary Monetary Policy. C) Contractionary Fiscal Policy. D) Expansionary Fiscal Policy. Show Answer Correct Answer: C) Contractionary Fiscal Policy. 29. Limited life applies to ..... A) Corporations. B) Multinationals. C) Sole proprietorships. D) Nonprofit organizations. Show Answer Correct Answer: C) Sole proprietorships. 30. Which of the following is a supply-side policy aimed at improving labor market efficiency? A) Reducing tax rates. B) Deregulating industries. C) Investing in education and training. D) Increasing government spending. Show Answer Correct Answer: C) Investing in education and training. ← PreviousNext →Related QuizzesEconomics QuizzesFinance QuizzesMacroeconomics Quiz 1Macroeconomics Quiz 2Macroeconomics Quiz 4Macroeconomics Quiz 5Macroeconomics Quiz 6Macroeconomics Quiz 7Macroeconomics Quiz 8Macroeconomics Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books