This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 5 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What is a period of macroeconomic expansion followed by a period of contraction or decline called? A) Business Cycle. B) Macroeconomics. C) Microeconomics. D) Gross Domestic Product (GDP). Show Answer Correct Answer: A) Business Cycle. 2. Anything that people will accept as payment for goods and services. A) Gold. B) Cows. C) Money. D) Credit Cards. Show Answer Correct Answer: C) Money. 3. Which best describes an import or imported good? A) Goods that are bought from foreign countries. B) Goods that are bought within the same country. Show Answer Correct Answer: A) Goods that are bought from foreign countries. 4. An economy is in macroeconomic equilibrium, producing at its normal capacity level of output. Without long-run economic growth, a persistent increase in aggregate demand is likely to lead to an increase in the level of ..... A) Productivity. B) Real GDP. C) Prices. D) Employment. Show Answer Correct Answer: C) Prices. 5. Completed goods counted in the GDP A) Durable Goods. B) Intermediate Goods. C) Final Goods. D) Non-Durable Goods. Show Answer Correct Answer: C) Final Goods. 6. Who is Adam Smith's theory compared to? A) Buddha. B) God. C) Mr. King. D) Karl Marx. Show Answer Correct Answer: D) Karl Marx. 7. If the Government wishes to increase the level of real GDP, it might reduce A) Taxes. B) Transfer payment. C) The size of the budget deficit. D) Its purchase of good and service. Show Answer Correct Answer: A) Taxes. 8. All of the following are crucial social and economic goals for Macroeconomics but ..... A) Economic Growth. B) Full Employment. C) Price instability. D) Price Stability. Show Answer Correct Answer: C) Price instability. 9. Currency appreciation could be caused by A) Supply Increase or Demand Increase. B) Supply Increase or Demand Decrease. C) Supply Decrease or Demand Decrease. D) Supply Decrease or Demand Increase. Show Answer Correct Answer: D) Supply Decrease or Demand Increase. 10. The IRS lays off thousands of employees every year after April 15th. This is an example of A) Structural unemployment. B) Seasonal unemployment. C) Cyclical unemployment. D) Frictional unemployment. Show Answer Correct Answer: B) Seasonal unemployment. 11. Suppose, the real interest rate increases by 4%, the domestic inflation is 4% and the foreign inflation is 2%. How much will the nominal exchange rate change? A) 1%. B) 8%. C) 6%. D) 2%. Show Answer Correct Answer: D) 2%. 12. If the economy is in a recession, the Federal Reserve could do all of the following EXCEPT A) Buy securities. B) Lower the discount rate. C) Lower the required reserve ratio. D) Lower taxes. Show Answer Correct Answer: D) Lower taxes. 13. By 2020 the government must run budget surpluses during 'normal times' when GDP growth is 1% or more A) The golden rule (Gordon Brown 1997). B) The normal times rule (George Osborne 2015). C) The sustainable investment rule (EU). D) The arbitrary household budget fallacy rule (Post-Keynesians). Show Answer Correct Answer: B) The normal times rule (George Osborne 2015). 14. Which of the following scenarios will cause interest rates to fall? A) A balanced budget with an increase in government spending. B) A budget surplus with an increase in government spending. C) A balanced budget with an increase in taxes. D) A budget deficit with a decrease in taxes. Show Answer Correct Answer: C) A balanced budget with an increase in taxes. 15. What causes currency appreciation/depreciation? A) Export Import. B) Perbedaan real exchange rate. C) Differences in inflation rates. D) Perbedaan nominal exchange rate. Show Answer Correct Answer: C) Differences in inflation rates. 16. Which of the following is not the subject matter of macroeconomics? A) National Income Accounting. B) Business cycle. C) Laws of demand and supply. D) General price level. Show Answer Correct Answer: C) Laws of demand and supply. 17. ..... is spending on new productive physical capital, such as machinery and structures, and on changes in inventories. A) Investment Spending. B) Private Savings. C) Inventories. D) Disposable Income. Show Answer Correct Answer: A) Investment Spending. 18. GMC Auto Company is looking for ways to increase efficiency and cut costs. After conducting research the company decides to save money by having a company in Mexico assemble their cars. Which best illustrates the actions of the GMC Auto Company? A) Downsizing. B) Outsourcing. Show Answer Correct Answer: B) Outsourcing. 19. Which of the following is an example of Keynesian economics? A) Increasing deficit spending. B) Increasing the reserve requirement. C) Printing more currency. D) Increasing taxes. Show Answer Correct Answer: A) Increasing deficit spending. 20. Ability to produce more output per work hour, a country's standard of living depends on its ability to produce goods/services A) Physical capital. B) Productivity. C) Natural resources. D) Human capital. Show Answer Correct Answer: B) Productivity. 21. What is the aggregate demand curve? A) The aggregate demand curve shows the relationship between inflation and unemployment in an economy. B) The aggregate demand curve represents the total supply of goods and services in an economy at different price levels. C) The aggregate demand curve represents the total demand for goods and services in an economy at different price levels. D) The aggregate demand curve only applies to a closed economy and does not account for international trade. Show Answer Correct Answer: C) The aggregate demand curve represents the total demand for goods and services in an economy at different price levels. 22. Which of these describes the Fed's Board of Governors? A) There are seven of them, chosen by the President to serve fourteen-year terms. B) There are fourteen of them, elected by popular vote every four years. C) There are twelve of them, chosen by the President to serve four-year terms. D) There are seven of them, each of them also serving in a Congressional financial subcommittee. Show Answer Correct Answer: A) There are seven of them, chosen by the President to serve fourteen-year terms. 23. Accumulation of annual deficits over the years A) Deficit. B) National debt. C) Budget surplus. D) None of above. Show Answer Correct Answer: B) National debt. 24. ..... is monetary policy that reduces aggregate demand. A) Contractionary Monetary Policy. B) Expansionary Monetary Policy. C) Stagnant Monetary Policy. D) None of above. Show Answer Correct Answer: A) Contractionary Monetary Policy. 25. Contractionary or Expansionary?Due to the current persistent increases in prices, the Bangko Sentral ng Pilipinas (BSP) decided to make its borrowing services more expensive. What type of macroeconomic policy is being described in this case? A) Contractionary. B) Expansionary. Show Answer Correct Answer: A) Contractionary. 26. Substitutes in production A) Alternative products that producers COULD use their resources to make. B) The quantity of something that producers have available for sale. C) A curve that shows the relationship between the price of a product and the quantity of the product supplied. D) The action of buying and selling goods and services. Show Answer Correct Answer: A) Alternative products that producers COULD use their resources to make. 27. If M increases and V increases A) Nominal GDP decreases. B) The effect on nominal GDP is indeterminate. C) Nominal GDP increases. D) Nominal GDP stays the same. Show Answer Correct Answer: C) Nominal GDP increases. 28. What is the purpose of GDP? A) To reflect the overall health and growth of an economy. B) To measure inflation. C) To measure unemployment. D) None of above. Show Answer Correct Answer: A) To reflect the overall health and growth of an economy. 29. The unemployment rate is calculated as the number of A) Unemployed divided by size of the labor force. B) Employed persons divided by number of unemployed persons. C) Persons in the labor force divided by the number of unemployed. D) Unemployed persons divided by number of employed persons. Show Answer Correct Answer: A) Unemployed divided by size of the labor force. 30. Which of the following would be included in calculating GDP? A) Social Security checks. B) Stocks. C) Intermediate goods. D) Unsold goods produced by a business. Show Answer Correct Answer: D) Unsold goods produced by a business. ← PreviousNext →Related QuizzesEconomics QuizzesFinance QuizzesMacroeconomics Quiz 1Macroeconomics Quiz 2Macroeconomics Quiz 3Macroeconomics Quiz 4Macroeconomics Quiz 6Macroeconomics Quiz 7Macroeconomics Quiz 8Macroeconomics Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books