This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 38 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 38 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which type of GDP accounts for inflation and is therefore the MOST accurate? A) Growth. B) Real. C) Non-Market. D) Nominal. Show Answer Correct Answer: B) Real. 2. Economic institution differs from country to country True or False? A) True. B) False. Show Answer Correct Answer: A) True. 3. Which monetary policy tool would be expansionary? A) Selling bonds via open market operations. B) Increase discount rate. C) Decrease reserve requirement. D) Increase interest paid on reserves. Show Answer Correct Answer: C) Decrease reserve requirement. 4. It is possible for an economy to increase its production of both goods if the economy A) Moves downward and to the right along its production possibilities frontier and the frontier is bowed outward. B) Moves upward and to the left along its production possibilities frontier and the frontier is bowed outward. C) Moves in either direction along its production possibilities frontier in the frontier is a straight line. D) Moves from a situation of inefficient production to a situation of efficient production. E) Moves upward and to the right along its production possibilities frontier in the frontier is bowed inward. Show Answer Correct Answer: D) Moves from a situation of inefficient production to a situation of efficient production. 5. Assume that the nominal interest rate is 10%, if the expected inflation rate is 5%, the real interest rate is A) 10%. B) 2%. C) 5%. D) 0.5%. Show Answer Correct Answer: C) 5%. 6. The crucial difference between the Keynesian and classical theories of money demand is that A) Keynes believed that money demand fluctuates with the return on other assets while the classical economists did not. B) Keynes took account of the transactions motive for money demand while the classical economists did not. C) Keynes assumed that velocity was constant while the classical economists did not. D) The classical economists considered income as a systematic influence on money demand and Keynes did not. Show Answer Correct Answer: A) Keynes believed that money demand fluctuates with the return on other assets while the classical economists did not. 7. Which card takes the money out of your account immediately? A) Debit. B) Credit. Show Answer Correct Answer: A) Debit. 8. Unemployment caused by a recession. A) Seasonal. B) Structural. C) Frictional. D) Cyclical. Show Answer Correct Answer: D) Cyclical. 9. Which of the following is an example of money functioning as a "medium of exchange" ? A) Using it to facilitate transactions. B) Using money for purchases in the future. C) Using it to compare the value of goods and services in relation to another. D) None of above. Show Answer Correct Answer: A) Using it to facilitate transactions. 10. Goods used to create finished products A) Final Goods. B) Durable Goods. C) Intermediate Goods. D) Non-Durable Goods. Show Answer Correct Answer: C) Intermediate Goods. 11. What does CPI stand for? A) Consumer Price Inflation. B) Consumer Price Index. C) Consumer Price Increase. D) None of above. Show Answer Correct Answer: B) Consumer Price Index. 12. Federal Reserve requires most financial institutions to keep a percentage of customer deposits in vault cash or as a deposit in their account with the Federal Reserve. A) Certificate of deposits. B) Interest rates. C) Reserve requirement. D) Capital gains. Show Answer Correct Answer: C) Reserve requirement. 13. Which of the following will occur if the federal government reduces defense spending? A) Aggregate demand will increase. B) Aggregate demand will decrease. C) Aggregate supply will increase. D) Aggregate supply will decrease. E) There will be no change in aggregate demand or supply. Show Answer Correct Answer: B) Aggregate demand will decrease. 14. The following are not included in the Gross Domestic Product component of the Expenditure approach A) Gross Fixed Capital Formation. B) Foreign exchange reserves. C) Import of Goods and Services. D) Government Consumption Expenditures. Show Answer Correct Answer: B) Foreign exchange reserves. 15. Which type of variable is measured at a point of time? A) Flow variable. B) Stock variable. Show Answer Correct Answer: B) Stock variable. 16. Increasing taxes is a type of: A) Tight fiscal policy. B) Loose monetary policy. C) Loose fiscal policy. D) Tight monetary policy. Show Answer Correct Answer: A) Tight fiscal policy. 17. Expansionary fiscal policy at home ie. an increase in G spending or decrease in T A) Reduces saving shift S to right. B) Increases saving, shift S to left. C) Reduces saving, shift S to left. D) Increases saving shift S to right. Show Answer Correct Answer: C) Reduces saving, shift S to left. 18. When prices rise A) Buyers pay less amount of money. B) Buyers pay more amount of money. C) Sellers get less amount of money. D) Buyers pay less amount of money. Show Answer Correct Answer: B) Buyers pay more amount of money. 19. In the long run, a decrease in the money supply ..... prices and ..... real GDP A) Won't change, increase. B) Increases, won't change. C) Won't change, decrease. D) Decreases, won't change. Show Answer Correct Answer: D) Decreases, won't change. 20. What would be the expected effect of expansionary fiscal policy using the Classical AS curve? A) A decrease in inflation and an increase in output. B) An increase in inflation and no change in output. C) An increase in inflation and a decrease in output. D) No change in inflation and an increase in output. E) No change in either inflation or output. Show Answer Correct Answer: B) An increase in inflation and no change in output. 21. Which of the following best describes an increase in structural unemployment? A) People must undergo a long retraining process in new skills after losing their jobs. B) People lose jobs in agriculture when the growing season ends. C) More job-search websites are created to better match job seekers. D) An economy enters a recession. Show Answer Correct Answer: A) People must undergo a long retraining process in new skills after losing their jobs. 22. Trade is made easier because of this function of money that eliminates the need to barter (trade goods for goods). A) Medium of Exchange. B) Divisibility. C) Store of Value. D) Unit of Account. Show Answer Correct Answer: A) Medium of Exchange. 23. At the existing price, quantity supplied exceeds the quantity demanded; also called excess supply A) Shortage. B) Surplus. C) Excess supply. D) Excess demand. Show Answer Correct Answer: B) Surplus. 24. If the economy was in a recession and Congress and the Federal Reserve Bank BOTH wanted to correct it quickly, which policy combination would be best? A) Raise taxes, buy treasury bonds. B) Increase government spending, sell treasury bonds. C) Cut taxes, sell treasury bonds. D) Cut taxes, buy treasury bonds. Show Answer Correct Answer: D) Cut taxes, buy treasury bonds. 25. The higher the disposable income the ..... A) Lower consumption. B) Higher saving. C) Autonomous consumption. D) Lower saving. Show Answer Correct Answer: B) Higher saving. 26. The natural rate of unemployment in Elizaland is 5%. The citizens of Elizaland expected inflation to be 2% and unemployment to be 5% during 2018. However, inflation turned out to be 6% and unemployment 1.5%.What happens in the long run as people begin to expect a permanantly higher rate of inflation? A) The short-run Phillips curve (SPRC) shifts to the left. B) The long-run Phillips curve (LRPC) shifts to the right. C) The long-run Phillips curve (LRPC) shifts to the left. D) The short-run Phillips curve (SRPC) shifts to the right. E) A movement to the right along the short-run Phillips curve (SRPC). Show Answer Correct Answer: D) The short-run Phillips curve (SRPC) shifts to the right. 27. What is the unemployment rate? A) The total population of a country divided by people who are employed (times 100). B) The number of people over 16 actively looking for work divided by the number of people in the labor force (times 100). C) The total population of a country divided by people who are unemployed (times 100). D) The number of jobless people actively looking for work divided by the number of people in the labor force (times 100). Show Answer Correct Answer: D) The number of jobless people actively looking for work divided by the number of people in the labor force (times 100). 28. Which one of the following would, in principle, be counted in an estimate of the gross domestic product of the euro area? A) The value of a CD you give a friend in exchange for having helped you study. B) The value of a book you buy from a used bookstore. C) The value of a new CD you buy from a store. D) The value of work you do as an intern in the United States. E) The value of the steel Fiat buys to make cars. Show Answer Correct Answer: C) The value of a new CD you buy from a store. 29. Taxing and spending A) Monetary. B) Fiscal. Show Answer Correct Answer: B) Fiscal. 30. Economics can be defined as ..... A) The science of decision making. B) The study of human behavior. C) The science of buying and selling. D) The study of unlimited resources. Show Answer Correct Answer: A) The science of decision making. ← 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