This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 4 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Amount of deposits that banks are required to keep on hand A) Monetary policy. B) Money creation. C) Reserve requirements. D) Prime rate. Show Answer Correct Answer: C) Reserve requirements. 2. TRUE or FALSE:The opportunity cost method of valuing household production considers the wage the individual doing the household work could have earned at a paid job. A) FALSE. B) TRUE. Show Answer Correct Answer: B) TRUE. 3. Is the amont of money circulating in the economy. A) Money supply. B) Treasury bills. C) Interest rate. D) Reserve requirement. Show Answer Correct Answer: A) Money supply. 4. The money supply includes all of the followingEXCEPT A) Bank balances accessible with debit cards. B) Paper currency. C) Metal coins. D) Lines of credit accessible with credit cards. Show Answer Correct Answer: D) Lines of credit accessible with credit cards. 5. A pair of shoes that costs $ 80 last month costs $ 100 this month. Which of the following BEST describes this economic condition? A) Inflation. B) Deflation. C) Recession. D) Expansion. Show Answer Correct Answer: A) Inflation. 6. Why might banks want to hold excess reserves in time of recession? A) To invest in high-risk assets. B) To reduce the amount of money available for lending. C) To increase the interest rates for customers. D) To ensure they have enough liquidity to meet customer withdrawals and cover potential loan losses. Show Answer Correct Answer: D) To ensure they have enough liquidity to meet customer withdrawals and cover potential loan losses. 7. Complete the Analogy.WITH JOB BUT NOT CURRENTLY AT WORK is to EMPLOYED, while NOT SEEKING FOR WORK DUE TO WAITING FOR APPLICATION RESULTS is to ..... A) Not part of the labor force. B) Underemployed. C) Unemployed. D) STILL employed. Show Answer Correct Answer: C) Unemployed. 8. Examples of payroll taxes are which? A) Social Security and Medicaire. B) FICA and state income. C) Property, sales and ad valorum. D) Gift and inheritance. Show Answer Correct Answer: A) Social Security and Medicaire. 9. A strong market with prices moving up for several months or years in a row is known as a A) Bull market. B) Bear market. Show Answer Correct Answer: A) Bull market. 10. Which part of the Fed decides when to raise or lower interest rates? A) Board of Governors. B) Federal Open Market Committee. C) Advisory Committee. D) Chairman. Show Answer Correct Answer: B) Federal Open Market Committee. 11. Which of the following best describes what dividends are? A) The increased value of a stock. B) A periodic payment to the owners of a stock. C) A reward for selecting good stocks. D) None of above. Show Answer Correct Answer: B) A periodic payment to the owners of a stock. 12. Partners who are only responsible up to the extent of their investment A) Trading partnership. B) Limited partnership. C) Special partnership. D) Non-trading partnership. Show Answer Correct Answer: B) Limited partnership. 13. In which system do producers try to make a profit? A) Traditional. B) Command. C) Market. D) None of above. Show Answer Correct Answer: C) Market. 14. Looser monetary policies lead to A) An inwards shift of the AD. B) An outwards shift of the AS. C) An inwards shift of the AS. D) An outwards shift of the AD. Show Answer Correct Answer: D) An outwards shift of the AD. 15. The unemployment rate is..... A) Increases during economic recovery and decreases during recessions. B) It is the percentage of the working age population that cannot find a job. C) A person who has lost hope of finding a job and stops looking for a job is included in the unemployment level. D) It is the ratio of the number of unemployed to the number of the labor force. Show Answer Correct Answer: D) It is the ratio of the number of unemployed to the number of the labor force. 16. An increase in output (goods and services) over time with full employment A) Stable prices. B) Stable growth. C) Stable shortage. D) Final good. Show Answer Correct Answer: B) Stable growth. 17. A drawback in using taxation as a way of redistributing income and wealth is A) It can create disincentives to worker, thereby harming efficiency and economic growth. B) Proportional taxes are pointless in redistributing income. C) Regressive taxes are inequitable. D) Progressive taxes redistribute income to the less well-off members of society. Show Answer Correct Answer: A) It can create disincentives to worker, thereby harming efficiency and economic growth. 18. From an economics perspective, human decision-making is based upon the concept of: A) Selfishness. B) Selflessness. C) Rational Self-Interest. D) Human Infallibility. Show Answer Correct Answer: C) Rational Self-Interest. 19. If I buy a house in 2020 that was built in 2020, would the 2020 GDP increase? A) Yes. B) No. Show Answer Correct Answer: A) Yes. 20. You have an infinite amount of scare resources. A) False. B) True. Show Answer Correct Answer: A) False. 21. A criticism of gross domestic product (GDP) is that it can both underestimate and overestimate production and well-being in an economy.Which of the following is a reason that GDP might underestimate the actual production and well-being in an economy? A) GDP ignores sustainability. B) GDP excludes production not traded in markets. C) GDP includes how difficult production is for workers. D) GDP is adjusted for changes in product quality and variety over time. . Show Answer Correct Answer: B) GDP excludes production not traded in markets. 22. The U.S. has a trade ..... with Mexico. A) Deficit. B) Surplus. Show Answer Correct Answer: A) Deficit. 23. Gross domestic private investment, as defined in national income accounts, would include the following, except: A) Changes to business inventories. B) All domestic construction done by the private sector. C) Government construction of new highways and dams. D) The value of all capital goods bought by business firms. Show Answer Correct Answer: C) Government construction of new highways and dams. 24. What is the fiscal policy? A) A general increase in prices. B) A decrease in prices. C) When the government puts a tax on trade. D) When the government changes tax rates. Show Answer Correct Answer: D) When the government changes tax rates. 25. The government can use a ..... to reduce its debt. A) Surplus. B) Loan. C) Deficit. D) Shortage. Show Answer Correct Answer: A) Surplus. 26. Sonia makes RM30, 000 per year and pays RM6, 000 in income taxes. Raj makes RM40, 000 and pays RM10, 000 in income taxes. This is an example of A) A regressive tax. B) A progressive tax. C) A proportional tax. D) A sale and service tax. Show Answer Correct Answer: B) A progressive tax. 27. Which of the following statements best captures the relationship between microeconomics and macroeconomics A) For the most part, microeconomist are unconcerned with macroeconomics, and macro economist I am concerned with microeconomics. B) Microeconomist study markets for small products, whereas macro economist study markets for large products. C) Microeconomics and macro economics are distinct from one another, Yet they are closely related. D) Micro economics is oriented toward policy studies, whereas macro economics is oriented toward theoretical studies. E) Macro economics is oriented toward policy studies, whereas microeconomics are oriented toward theoretical studies. Show Answer Correct Answer: C) Microeconomics and macro economics are distinct from one another, Yet they are closely related. 28. Unemployment rates are extremely low, prices are going up, and wages are increasing at a pretty rapid clip. The Fed will most likely react to this scenario by doing what? A) Increasing the supply of money. B) Lowering the reserve requirements. C) Restricting the supply of money. D) Lowering interest rates. Show Answer Correct Answer: C) Restricting the supply of money. 29. What is Cost-push inflation? A) The decrease prices of the factors of the production leads to decreased supply of these goods. B) The increase prices of the factors of the production leads to a decreased supply of these goods. Show Answer Correct Answer: B) The increase prices of the factors of the production leads to a decreased supply of these goods. 30. Which of the following is an example of expansionary fiscal policy? A) Lowering taxes. B) Decreasing government spending. C) Raising taxes. D) All of the above. Show Answer Correct Answer: A) Lowering taxes. ← PreviousNext →Related QuizzesEconomics QuizzesFinance QuizzesMacroeconomics Quiz 1Macroeconomics Quiz 2Macroeconomics Quiz 3Macroeconomics Quiz 5Macroeconomics Quiz 6Macroeconomics Quiz 7Macroeconomics Quiz 8Macroeconomics Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books