This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 31 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 31 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. All other things being equal, in the short run, a decrease in aggregate demand in an economy is most likely to result in a reduction in A) The balance of payments deficit on the current account. B) The budget deficit. C) Government spending on welfare benefits. D) The unemployment rate. Show Answer Correct Answer: A) The balance of payments deficit on the current account. 2. Fill in the blanks:GDP is the ..... value of all ..... goods and services produced within a country in a year. A) Market, final. B) Dollar, exportable. C) Production, saleable. D) Input, intermediate. Show Answer Correct Answer: A) Market, final. 3. What problems are we most likely to see at which stage of the business cycle? A) High unemployment during booms. B) High inflation during recessions. C) Low inflation during booms. D) High unemployment during recessions. Show Answer Correct Answer: D) High unemployment during recessions. 4. A country has a(n) ..... when the government keeps the exchange rate against some other currency at or near a particular target. A) Fixed Exchange Rate. B) Exchange Rate Regime. C) Floating Exchange Rate. D) None of above. Show Answer Correct Answer: A) Fixed Exchange Rate. 5. An increase in which of the following will most likely reduce the federal government's budget deficit? A) Defense spending. B) Government transfer payments. C) Income tax rates. D) Tax credits for investment spending. E) Interest rates. Show Answer Correct Answer: C) Income tax rates. 6. One of the reasons aggregate demand curve is downward sloping is because alower price level means that the real exchange rate: A) Depreciates, making domestic goods cheaper in other countries and importsless competitive, resulting in a higher level of net exports. B) Appreciates, making domestic goods more expensive in other countries andimports more competitive, resulting in a higher level of net exports. C) Appreciates, making the country's exports and imports less competitive and leading to lower net exports. D) None of above. Show Answer Correct Answer: A) Depreciates, making domestic goods cheaper in other countries and importsless competitive, resulting in a higher level of net exports. 7. Which of the following would the Federal Reserve do to raise the money supply? A) Sell bonds. B) Raise the reserve requirement. C) Buy securities. D) Raise the discount rate. Show Answer Correct Answer: C) Buy securities. 8. Suppose the population is 175 million people, the number of people unemployed is 20 million and the number of people employed is 130 million. Calculate the labour force participation rate A) 86.7%. B) 85.7%. C) 15.4%. D) 13.3%. Show Answer Correct Answer: D) 13.3%. 9. Capital goods are those goods: A) Which are used in the production process for several years. B) Which are used in the production process for few years. C) Which involve depreciation losses. D) Both (a) and (c). Show Answer Correct Answer: D) Both (a) and (c). 10. As a result of too much money coming in from abroad, where exports are very high, while imports are low, this results in..... A) Increase in aggregate demand. B) Decrease in aggregate demand. C) Increase in aggregate supply. D) Decrease in aggregate supply. Show Answer Correct Answer: A) Increase in aggregate demand. 11. A mixed economy: A) Allocates resources via supply but not demand. B) Allocates resources via demand but not supply. C) Allocates resources via supply and demand. D) Allocates resources via market forces and government intervention. Show Answer Correct Answer: D) Allocates resources via market forces and government intervention. 12. The demand for flour has increased in August without any change in supply. Five months later there was no change in the price of flour. This is an example of: A) Price elasticity. B) Macroeconomics prices. C) Sticky prices. D) Controlled prices. Show Answer Correct Answer: C) Sticky prices. 13. What is NOT a consequence of contractionary fiscal policy A) Aggregate demand shifts left. B) Price level increases. C) Unemployment increases. D) Output decreases. Show Answer Correct Answer: B) Price level increases. 14. The goal of fiscal policy is to achieve full employment by shifting this curve: A) Long Run Aggregate Supply. B) Aggregate Demand. C) Short Run Aggregate Supply. D) Phillips. Show Answer Correct Answer: B) Aggregate Demand. 15. Which of the following is an appropriate discretionary fiscal policy if equilibrium real GDP falls below potential real GDP? A) A decrease in transfer payments. B) An increase in the supply of money. C) An increase in individual income taxes. D) An increase in government purchases. Show Answer Correct Answer: D) An increase in government purchases. 16. In the circular flow of income model, which one of the following equations is correct? A) Income = Output = Injections. B) Output = Expenditure = Withdrawals. C) Income = Output = Expenditure. D) Expenditure = Income = Injections = Withdrawals. Show Answer Correct Answer: C) Income = Output = Expenditure. 17. Which of the following is income that is not used to calculate the national income of a country? A) Income from the sale of second-hand goods. B) Income from transfer or pension. C) Income from the sale of illegal goods. D) All the points are correct. Show Answer Correct Answer: A) Income from the sale of second-hand goods. 18. Monetarists believe that:I. Monetary policy has a big influence on the economyII. Monetary policy is ineffective for short-term stability purposesIII. The time lag between the implementation of monetary policy and the expected results is quite long and difficult to predict precisely. IV. Money is not the most important thing A) I and III only. B) II and III only. C) I, II, and III only. D) I, II, III, and IV. Show Answer Correct Answer: C) I, II, and III only. 19. A student who just graduated from college and is waiting to start their new job is ..... A) Frictionally unemployed. B) Structurally unemployed. C) Technologically unemployed. D) Cyclically unemployed. E) Seasonally unemployed. Show Answer Correct Answer: A) Frictionally unemployed. 20. Is this counted in the GDP of the US?A plumber's purchase of a two-year-old truck from Craigslist. A) No. B) Yes. Show Answer Correct Answer: A) No. 21. If exchange rates are allowed to fluctuate freely and the United States demand for Indian rupees increases, which of the following will most likely occur? A) The dollar price of Indian goods will increase. B) The rupee price of United States goods will increase. C) The United States balance-of-payments deficits will increase. D) The dollar price of rupees will fall. E) The dollar price of Indian goods will fall. Show Answer Correct Answer: A) The dollar price of Indian goods will increase. 22. The amount of debt that a country accumulates in one fiscal year is known as ..... A) Bankruptucy. B) National Dept. C) Contraction. D) Budget Deficit. Show Answer Correct Answer: D) Budget Deficit. 23. The highest point in an economic expansion, when GDP no longer increases, is called A) Peak. B) Contraction. C) Trough. D) Expansion. Show Answer Correct Answer: A) Peak. 24. Influencing the economy by changing the reserve requirement is called: A) Fiscal policy. B) Easy Money. C) Monetary policy. D) Tight Money. Show Answer Correct Answer: C) Monetary policy. 25. Which one is NOT true? A) C = a + b Yd. B) C =-a + b Yd. C) APC + APS = 1. D) MPC + MPS = 1. Show Answer Correct Answer: B) C =-a + b Yd. 26. This is the factor by which a change in both spending and taxes changes real GDP. A) Tax Multiplier. B) Balanced Budget Multiplier. Show Answer Correct Answer: B) Balanced Budget Multiplier. 27. Which of these are MOST likely to lead to inflation? A) An increase in cost of production. B) Reduced prices for goods and services. C) An increase in the aggregate supply of goods and services. D) He application of price ceilings. Show Answer Correct Answer: A) An increase in cost of production. 28. Which one influence the interest rate? A) Monetary policy. B) Fiscal policy. C) Trade policy. D) None of above. Show Answer Correct Answer: B) Fiscal policy. 29. What is the difference between an individual and market demand schedule? A) Quantity supplied. B) Quantity. C) Supply. D) Price. Show Answer Correct Answer: B) Quantity. 30. A positive output gap exists when ..... A) Actual GDP is less than potential GDP. B) Actual GDP is greater than potential GDP. C) The production possibilities curve moves inward. D) The long run potential GDP shifts outward. Show Answer Correct Answer: B) Actual GDP is greater than potential GDP. ← 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