This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 34 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 34 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Assume that the economy is at full employment. Policy makers wish to maintain the price level but want to encourage greater investment. Which of the following combinations of monetary policy and fiscal policy would best achieve this goal? (monetary policy first option, fiscal policy second option) A) Expansionary, no change. B) Expansionary, contractionary. C) No change, contractionary. D) Expansionary, expansionary. Show Answer Correct Answer: B) Expansionary, contractionary. 2. Fiscal policy is enacted through changes in what? A) Interest rates. B) The supply of money. C) Unemployment and inflation. D) Taxation and government spending. Show Answer Correct Answer: D) Taxation and government spending. 3. Measuring the rate of unemployment A) Macroeconomics. B) Microeconomic. Show Answer Correct Answer: A) Macroeconomics. 4. Monetary Policy is the Federal Reserve Systems attempt to ..... A) Control the amount of money in circulation. B) Control the Federal Government's debt. C) Control state governments' spending. D) None of these answers are correct. Show Answer Correct Answer: A) Control the amount of money in circulation. 5. Elasticity is the measure of ..... A) Responsiveness. B) Price. C) Need. D) Change. Show Answer Correct Answer: A) Responsiveness. 6. GDP is the national output index calculated according to? A) Territorial perspective. B) The final product was created during the year. C) Added value of all industries producing goods and services at home and abroad during the year. D) A and b are correct. Show Answer Correct Answer: D) A and b are correct. 7. Which of these is NOT one of the main functions of the Federal Reserve? A) Provide deposit insurance. B) Regulate capital requirements. C) Set and maintain/regulate reserve requirements. D) Lend through the discount window. E) Conduct fiscal policy. Show Answer Correct Answer: E) Conduct fiscal policy. 8. Which is the following statement is incorrect? A) Right to own property. B) There is equality income in economy. Show Answer Correct Answer: B) There is equality income in economy. 9. The crowding out effect manifests itself in the GDP formula by causing A) An increase in G and a decrease in Xn. B) A decrease in G and an increase in C. C) An increase in I and a decrease in G. D) An increase in G but a decrease in I. Show Answer Correct Answer: D) An increase in G but a decrease in I. 10. Gross investment equals to A) Gross capital formation + depreciation. B) Net fixed investment + additions to stock + depreciation. C) Net fixed investment + depreciation. D) Net investment + depreciation + change in stock. Show Answer Correct Answer: B) Net fixed investment + additions to stock + depreciation. 11. A business required to hire only union members A) Right to Work Law. B) Open Shop. C) Closed Business. D) Open Business. Show Answer Correct Answer: B) Open Shop. 12. When government expenditure is similar to revenue, the budget is ..... A) Minimum budget. B) Balanced budget. C) Maximum budget. D) Surplus budget. Show Answer Correct Answer: B) Balanced budget. 13. Economic Growth may have disadvantages because: A) Governments spend more. B) Resources may get depleted. C) Firm owners get rich. D) Workers earn more. Show Answer Correct Answer: B) Resources may get depleted. 14. Consumer Spending is the largest portion of GDP A) False. B) True. Show Answer Correct Answer: B) True. 15. All consumers experience the same inflation rate becasue everyone buys the same market basket. A) True. B) False. Show Answer Correct Answer: B) False. 16. Which of the following fiscal and monetary policy combinations would MOST LIKELY cause GDP to increase and unemployment to fall? A) Cut Taxes Buy bonds. B) Cut taxes Raise spending. C) Cut taxes Sell bonds. D) Cut taxes Decrease spending. Show Answer Correct Answer: A) Cut Taxes Buy bonds. 17. What is used to determine if prices are stable or not? A) Unemployment Rates. B) The Labor Force. C) Inflation. D) Consumer Price Index (CPI). Show Answer Correct Answer: D) Consumer Price Index (CPI). 18. Assume that a country with an open economy has a fixed exchange-rate system and that its currency is currently overvalued in the foreign exchange market. Which of the following must be true at the official exchange rate? A) The quantity of the country's currency supplied is less than the quantity demanded. B) The quantity of the country's currency supplied exceeds the quantity demanded. C) The demand curve for the country's currency is horizontal. D) The supply curve for the country's currency is horizontal. E) The domestic interest rate is equal to the interest rate in the rest of the world. Show Answer Correct Answer: A) The quantity of the country's currency supplied is less than the quantity demanded. 19. If the unemployment rate is rising and GDP is falling, the fiscal policy action that the federal government should MOST likely follow is A) Decreasing the money supply. B) Decreasing spending. C) Decreasing the reserve requirement. D) Decreasing taxes. Show Answer Correct Answer: D) Decreasing taxes. 20. Which of the following is an example of inelastic demand? A) Jason wants the most expensive cellphone. He decides to get a cheaper model. B) Priya wants to go to the season-opening game. Tickets to another game cost less, but she still buys tickets for the opener. C) Tianna wants to try out a new, expensive restaurant. She goes to another restaurant whose food is excellent and costs less. D) Shawn wants to buy a house in one neighborhood. But after searching, he decides to buy a house elsewhere instead. Show Answer Correct Answer: B) Priya wants to go to the season-opening game. Tickets to another game cost less, but she still buys tickets for the opener. 21. The ..... rate is the interest rate the Fed charges on loans to banks. A) Federal Funds. B) Interest. C) Discount. D) Loanable. Show Answer Correct Answer: C) Discount. 22. Identify the contractionary monetary tool of the central bank to control inflation. A) Decrease the reserve requirements. B) Decrease the bank rate. C) Selling of government securities in the open market. D) Decrease the rate of interest. Show Answer Correct Answer: C) Selling of government securities in the open market. 23. Corn/TV Sets A 0/6 B 12/5 C 22/4 D 30/3 E 36/2 F 40/1 G 42/0The OC of producing the sixth TV set is A) 2 units of corn. B) 12 units of corn. C) 40 units of corn. D) 42 units of corn. Show Answer Correct Answer: B) 12 units of corn. 24. According to the view of modern economics, the main tool for measuring economic activity is..... A) Gross National Product (GNP). B) Gross Domestic Product (Gross Domestic Product). C) Net National Product (PNN). D) Net National Income (PN). E) All wrong. Show Answer Correct Answer: A) Gross National Product (GNP). 25. What do business owners consider when they select a business ownership structure? A) Personal circumstances, type of business, and product mix. B) Product versatility, financial needs, and advertising strategies. C) Personal circumstances, financial needs, and type of business. D) Product versatility, advertising strategies, and personal circumstances. Show Answer Correct Answer: C) Personal circumstances, financial needs, and type of business. 26. A period in which the economy declines and shrinks A) Slump. B) Contraction. C) Recession. D) All of the above. Show Answer Correct Answer: D) All of the above. 27. If Vietnam's trading partners grow strongly and buy more Vietnamese goods, in the short run A) The price level falls, output remains unchanged. B) The price level falls, output decreases. C) The price level increases, output decreases. D) None of the above. Show Answer Correct Answer: D) None of the above. 28. What is the difference between product markets and factor markets? A) Product markets are where goods and services are bought and sold; factor markets are where resources (such as capital and labor) are bought and sold. B) Factor markets are where goods and services are bought and sold; product markets are where resources (such as capital and labor) are bought and sold. C) They are the same. D) None of above. Show Answer Correct Answer: A) Product markets are where goods and services are bought and sold; factor markets are where resources (such as capital and labor) are bought and sold. 29. What is currency used to buy? A) Producers and consumers. B) Goods and services. C) Productive resources. D) Supply and demand. Show Answer Correct Answer: B) Goods and services. 30. Short-term macro policy issues include: A) Inflation, Unemployment and imbalance in the balance of payments. B) Inflation, increase in production capacity and imbalance in the balance of payments. C) Population growth, increased production capacity and the availability of funds for investment. D) Population growth, increase in production capacity and imbalance in the balance of payments. E) Inflation, increase in production capacity and availability of funds for investment. Show Answer Correct Answer: A) Inflation, Unemployment and imbalance in the balance of payments. ← 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