This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 48 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 48 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Expansionary Fiscal Policy A) Output is low and unemployment is more than NRU. Actual GDP is below potential GDP. B) Laws that reduce inflation, decrease GDP (Close an Inflationary Gap)-G or + taxes (-C). C) Output is high and unemployment is less than NRU. Actual GDP is above potential GDP. D) A gap with higher prices and a decrease in GDP. E) Laws that reduce unemployment and increase GDP (Close a Recessionary Gap) + G or-taxes (+C). Show Answer Correct Answer: E) Laws that reduce unemployment and increase GDP (Close a Recessionary Gap) + G or-taxes (+C). 2. King Thranduil of the Woodland Realm is trying to rescue the kingdom from a severe recession by engaging in expansionary fiscal policy. As a result of the expansionary fiscal policy, the Woodland Realm now has a budget deficit. Meanwhile, the president of the central bank is Smaug, who wants to maintain a steady interest rate.What is the appropriate action for the central bank to take in order to reduce the impact of the expansionary fiscal policy on interest rates? A) Increase the reserve requirement. B) Decrease taxes. C) Increase taxes. D) Buy bonds. E) Sell bonds. Show Answer Correct Answer: D) Buy bonds. 3. Kurt runs his own business producing music and selling it online. How would he be categorized by the BLS? A) Unemployed. B) Underemployed. C) Not in the Labor Force. D) Employed. Show Answer Correct Answer: D) Employed. 4. When a period of steady work is followed by a period of unemployment each year, this is: A) Cyclical Unemployment. B) Frictional Unemployment. C) Seasonal Unemployment. D) Structural Unemployment. Show Answer Correct Answer: C) Seasonal Unemployment. 5. If the dollar changes from 100 to 80 per dollar against the Japanese yen, the dollar will strengthen. A) Lie. B) True. Show Answer Correct Answer: A) Lie. 6. What is the equation for calculating GDP using the expenditures approach? A) Wages + Rent + Interest + Profit. B) C + I + G + Xn. C) Exports-Imports. D) Value added at each stage of production. Show Answer Correct Answer: B) C + I + G + Xn. 7. What is the equilibrium level of output? A) The equilibrium level of output is the level at which aggregate demand equals aggregate supply. B) The equilibrium level of output is the level at which aggregate demand exceeds aggregate supply. C) The equilibrium level of output is the level at which aggregate supply exceeds aggregate demand. D) The equilibrium level of output is the level at which there is no aggregate demand or supply. Show Answer Correct Answer: A) The equilibrium level of output is the level at which aggregate demand equals aggregate supply. 8. Which sector describes businesses who create products? A) Firms. B) Factor Market. C) Households. D) Product Market. Show Answer Correct Answer: A) Firms. 9. Which of the following is a market-based supply-side policy designed to reduce the level of unemployment? A) A cut in interest rates to stimulate economic growth in the economy. B) A cut in the basic rate of personal income tax. C) A rise in the budget for unemployment benefits. D) Abolishing the minimum wage in an attempt to create incentives to work. Show Answer Correct Answer: B) A cut in the basic rate of personal income tax. 10. What is a mixed command economy? A) A command economy with some market elements. B) A market economy with some command elements. Show Answer Correct Answer: A) A command economy with some market elements. 11. An economic model illustrating how economic activity fluctuates over time. A) Business Cycle. B) Circular Flow. Show Answer Correct Answer: A) Business Cycle. 12. A binding price ceiling line is ..... the market equilibrium point. A) Below. B) Above. C) To the right of. D) To the left of. Show Answer Correct Answer: A) Below. 13. Which of the following is NOT a mandatory spending item in the government's budget? A) Defense. B) Interest payments on debt. C) Social Security. D) Medicare. Show Answer Correct Answer: A) Defense. 14. Research & Development leads to new inventions and innovations that will later on lead to efficiency in trade between nations. A) False. B) True. Show Answer Correct Answer: A) False. 15. Net national product does not include ..... A) Interest on consumer loans. B) Depreciation. C) Undistributed corporate profit. D) Taxes on corporate profits. Show Answer Correct Answer: B) Depreciation. 16. Which is an example of things that would be listed in a "market basket." A) Salmon. B) Xbox. C) Bread. D) Car. Show Answer Correct Answer: C) Bread. 17. There are 6 American Made car manufacturers in the United States. What type of market structure does this represent? A) Monopoly. B) Monolistic competition. C) Oligopoly. D) Pure competition. Show Answer Correct Answer: C) Oligopoly. 18. Which part of the business cycle is characterized by high unemployment rates and a falling economy? A) Peak. B) Expansion. C) Trough. D) None of above. Show Answer Correct Answer: C) Trough. 19. What is the labor force participation rate? A) The percentage of the total population that is in the labor force. B) The percentage of the labor force that is not in the labor force. C) The percentage of the labor force that is unemployed. D) The percentage of the total population that is employed. Show Answer Correct Answer: A) The percentage of the total population that is in the labor force. 20. In this context, "labor released " is best characterized as: A) Structural unemployment. B) Cyclical unemployment. C) Frictional unemployment. D) Seasonal unemployment. Show Answer Correct Answer: A) Structural unemployment. 21. When there is deflation in the economy: A) The general price level becomes negative. B) The nominal interest rate rises. C) The general price level increases. D) The general price level falls. Show Answer Correct Answer: D) The general price level falls. 22. What the definition of deflation? A) Decrease in the average price of goods and services. B) Occurs when the price of goods and services rise. C) Increase in prices. D) I don't know. Show Answer Correct Answer: A) Decrease in the average price of goods and services. 23. Monetary value of what households spend on final goods and services in the product market in a given time period. A) Investment. B) Consumer Spending. C) Net Exports. D) Government Spending. Show Answer Correct Answer: B) Consumer Spending. 24. Will the following scenario affect the current account or capital account, and will the transaction be a debit or credit? An American working in Saudi Arabia sends his wife, who lives in Atlanta, money so she can buy a new car. A) Capital account; debit. B) Current account; credit. C) Current account; debit. D) Capital account; credit. Show Answer Correct Answer: B) Current account; credit. 25. What is the size of the Labor Force? Unemployed (Looking for job) = 20 Retired = 5 Prison = 2 School = 10 Employed = 180 Unemployed (not looking for job) = 20 A) 237. B) 200. C) 180. D) 220. Show Answer Correct Answer: B) 200. 26. Karl Marx is considered the "father" of what Economic and Political system? A) Traditional Economy. B) Communism. C) Socialism. D) Capitalism. Show Answer Correct Answer: B) Communism. 27. Consumer spending, business investments, government spending, net exports Government expenditures that exceed government revenue in a fiscal year is called? A) Inflation. B) Monetary Policy. C) Gross Domestic Product. D) Deficit. Show Answer Correct Answer: C) Gross Domestic Product. 28. Contractionary fiscal policy can be carried out through A) Increasing taxes. B) Decreasing taxes. C) Maintaining government expenditure. D) Increasing government expenditure. Show Answer Correct Answer: A) Increasing taxes. 29. Macroeconomics is concerned with all the following EXCEPT ..... A) The growth of real output. B) The general level of prices. C) The level of unemployment. D) Production methods and cost. Show Answer Correct Answer: D) Production methods and cost. 30. Which of the following is not a qualitative monetary policy? A) Moral persuasion. B) Selective credit control. C) Raising discount rate operations. D) Special directive. Show Answer Correct Answer: C) Raising discount rate operations. ← 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