This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 45 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 45 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Suppose the Fed decides to buy bonds and New Hampshire Colonial Bank decides to sell $ 10 million worth of bonds. What will New Hampshire Colonial Bank most likely be able to do? A) Borrow more reserves from other banks. B) Make new loans totaling about $ 10 million. C) Reduce its outstanding loans by $ 10 million. D) Borrow more reserves at the "discount window" . Show Answer Correct Answer: B) Make new loans totaling about $ 10 million. 2. Which option is not studied in macroeconomics? A) The impacts of progressive taxation. B) The consequences of a higher interest rate. C) The impacts of price changes in the market of smartphones. D) The effects of a lower exchange rate. Show Answer Correct Answer: C) The impacts of price changes in the market of smartphones. 3. How would a significant increase in consumption and economic activity among a nation's consumers affect the nation's economy? A) It would decrease income inequality. B) It would cause inflation rates to rise. C) Businesses would be able to hire more workers. D) The value of the nation's currency would fall. Show Answer Correct Answer: B) It would cause inflation rates to rise. 4. What are the four factors of production?-J A) Land, Labor, Capital, Entrepeneurship. B) Capital, Cost, Credit, Collateral. C) Money, Money, Money, Money. D) There aren't four, there are five. Show Answer Correct Answer: A) Land, Labor, Capital, Entrepeneurship. 5. If the federal government wants to encourage businesses and consumers to spend more money, it would MOST LIKELY A) Increase the tax rate. B) Decrease the tax rate. C) Increase the reserve requirement. D) Decrease government spending on goods and services. Show Answer Correct Answer: B) Decrease the tax rate. 6. What is the difference between automatic stabilizers and discretionary Fiscal Policy measures? A) Automatic stabilizers are permanent policies while discretionary measures are temporary. B) Automatic stabilizers are implemented by the central bank while discretionary measures are implemented by the government. C) Automatic stabilizers respond automatically to changes in the economy while discretionary measures require a deliberate decision by the government. D) There is no difference between automatic stabilizers and discretionary measures. Show Answer Correct Answer: C) Automatic stabilizers respond automatically to changes in the economy while discretionary measures require a deliberate decision by the government. 7. Which situation below is MOST negatively affected by unanticipated inflation? A) Banks that loaned money at a fixed rate. B) Convenience stores that sell staple goods. C) Farmers with fixed rate mortgages. D) Businesses that profit from credit sales. Show Answer Correct Answer: A) Banks that loaned money at a fixed rate. 8. The law of increasing opportunity cost is reflected in the shape of the A) Production possibilities curve concave to the origin. B) Straight-line production possibilities curve. C) Production possibilities curve convex to the origin. D) Upward-sloping production possibilities curve. Show Answer Correct Answer: A) Production possibilities curve concave to the origin. 9. If taxes are raised, but the Fed prevents income from falling by raising the money supply, then A) Both consumption and investment remain unchanged. B) Consumption rises but investment falls. C) Investment rises but consumption falls. D) Both consumption and investment falls. Show Answer Correct Answer: C) Investment rises but consumption falls. 10. If supply of apples has fallen because of a worker shortage, and demand for apples has stayed the same, what will most likely happen to prices of apples? A) Prices will decrease. B) Prices will increase. Show Answer Correct Answer: B) Prices will increase. 11. The expenditure by households on consumption goods and services. A) Business Cycle. B) Exports of goods and services. C) Consumption expenditure. D) Government expenditure on goods and services. Show Answer Correct Answer: C) Consumption expenditure. 12. If the Keynesian consumption function is C=10+0.8 Y then, if disposable income is Rs 1000, what is amount of total consumption? A) ₹ 810. B) ₹ 0.8. C) ₹ 800. D) ₹ 0.81. Show Answer Correct Answer: A) ₹ 810. 13. The economy isn't doing very well due to a recession. Lots of people have been laid off and no one is buying anything because they don't have the money. If the Chair of the Federal Reserve wants to lower the unemployment rate, which policy should they choose? A) Lower the Federal Funds Rate. B) Raise the Federal Funds Rate. Show Answer Correct Answer: A) Lower the Federal Funds Rate. 14. Under a ..... tax system, individuals and entities with low incomes pay a higher amount of that income in taxes compared to high-income earners. A) Flat. B) Proportional. C) Regressive. D) Progressive. Show Answer Correct Answer: C) Regressive. 15. National Saving adalah A) S=(Y-T-C)+(T-G). B) S=T-G. C) S=Y-T-C. D) S=I. Show Answer Correct Answer: A) S=(Y-T-C)+(T-G). 16. Higher taxes have reduced disposable income in Fredland.What happens to household savings and the real interest rate in the short run, and potential output in the long run? A) Household saving increases; the real interest rate decreases, and potential output increases. B) Household saving decreases; the real interest rate decreases, and potential output increases. C) Household saving decreases; the real interest rate decreases, and potential output increases. D) Household saving decreases; the real interest rate increases, and potential output decreases. E) Household saving increases; the real interest rate decreases, and potential output is unaffected. Show Answer Correct Answer: D) Household saving decreases; the real interest rate increases, and potential output decreases. 17. The main advantage of mutual funds is that they provide ..... A) A way to avoid fluctuations in stock and bond prices. B) An easy way to hold a diversified portfolio. C) A return insured by the government. D) An asset that is widely used as the medium of exchange. Show Answer Correct Answer: B) An easy way to hold a diversified portfolio. 18. M1 money supply in Malaysia consists of ..... A) Coins and bank notes. B) Currency in circulation and current deposits. C) Coins, paper money and saving deposits. D) Currency in circulation, savings deposit and time deposits. Show Answer Correct Answer: C) Coins, paper money and saving deposits. 19. The ..... measures the prices of goods and services purchased by producers. A) Consumer Price Index (CPI). B) Producer Price Index (PPI). C) Inflation Rate. D) Aggregate Price Level. Show Answer Correct Answer: B) Producer Price Index (PPI). 20. Which of the following choices is most likely to create a rightward shift of the production possibilities curve? A) Contractionary fiscal policy. B) Expansionary fiscal policy. C) Instability in financial markets. D) Greater investments in human capital. E) Higher consumer spending. Show Answer Correct Answer: D) Greater investments in human capital. 21. In the short run, an increase in a government budget deficit is most likely to reduce A) Inflation. B) Unemployment. C) Interest rates. D) Imports. Show Answer Correct Answer: B) Unemployment. 22. During an economic recession, how would the United States Federal Reserve alter their monetary policy? A) The Fed would increase the discount rate on loans. B) The Fed would buy bonds from investors. C) The Fed would wait for the Secretary of the Treasury to make the decision. D) The Fed would raise the reserve requirement for banks. Show Answer Correct Answer: B) The Fed would buy bonds from investors. 23. The national security argument for tariff protection is based on the need to: A) Trade only with other friendly countries and impose tariffs on the rest. B) Protect employment in key industries. C) Protect defence-related industries in case of war. D) Raise money to field a sufficiently large army. Show Answer Correct Answer: C) Protect defence-related industries in case of war. 24. The sum of all incomes of the people of a country is called A) GDP. B) National Income. Show Answer Correct Answer: B) National Income. 25. An economy based on free markets with limited government interference. A) Capitalism. B) Communism. C) Command economy. D) Traditional economy. Show Answer Correct Answer: A) Capitalism. 26. Is labor scarce?-J A) No. B) Yes. Show Answer Correct Answer: B) Yes. 27. Which model encourages demand-side policies A) Keynesian. B) New Classical. C) Modern. D) Demand-oriented. Show Answer Correct Answer: A) Keynesian. 28. Which of the following would NOT increase a nation's Potential GDP? A) A better educated and trained labor force. B) The discovery of new natural resources. C) A plague that reduces the population. D) Investment in capital resources. Show Answer Correct Answer: C) A plague that reduces the population. 29. What is it called when all or most of the people who are willing and able to work are actually working? A) Partial Employment. B) Full Employment. C) Low Unemployment. D) Employment. Show Answer Correct Answer: B) Full Employment. 30. The federal government uses government spending and tax rates to help control recessions and encourage economic activity. This is called A) Supply-side economics. B) Fiscal policy. C) Monetary policy. D) Open market operations. Show Answer Correct Answer: B) Fiscal policy. ← 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