This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 51 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 51 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is the money flow that corresponds to the real flow of resources? A) Factors of production. B) Incomes. C) Consumption. D) Resources and goods. Show Answer Correct Answer: D) Resources and goods. 2. What impossible trinity scenario is it that cannot be achieved? A) Free capital mobility Not having a monetary policy Having a flexible exchange rate. B) Free capital mobilityHave monetary policyHave a fixed exchange rate. C) Not having free capital mobilityHaving monetary policyHaving a fixed exchange rate. D) Free capital mobility Not having a monetary policy Having a fixed exchange rate. E) Free capital mobilityHave monetary policyHave a flexible exchange rate. Show Answer Correct Answer: B) Free capital mobilityHave monetary policyHave a fixed exchange rate. 3. The vertical portion of LM curve indicates A) Infinite interest elasticity. B) Zero interest elasticity. C) Infinite income elasticity. D) Zero income elasticity. Show Answer Correct Answer: B) Zero interest elasticity. 4. During a economic expansion, the Federal Government should use ..... A) An expansionary fiscal policy. B) A contractionary fiscal policy. Show Answer Correct Answer: B) A contractionary fiscal policy. 5. Which person below would be considered frictionally unemployed? A) Jake, who has recently entered the labor force. B) Jimmy, whose parents shut down the family farm. C) Jill, who quit her job to become a full time student. D) Jennifer, whose skills are no longer needed. Show Answer Correct Answer: A) Jake, who has recently entered the labor force. 6. Equals the amount sellers receive for their goods minus their costs of production. Used to measure the economic well being of producers. A) Fixed costs. B) Economic utility. C) Producer surplus. D) Variable costs. Show Answer Correct Answer: C) Producer surplus. 7. Suppose the Federal Reserve wants to reduce the nation's money supply. The Fed could accomplish this by doing all of the following except what? A) Sell bonds on the open market. B) Increase the reserve requirement. C) Raise the interest rate on bank reserves. D) Decrease the discount rate. Show Answer Correct Answer: D) Decrease the discount rate. 8. What are the tools of macroeconomics? A) Monetary Policy. B) Fiscal Policy. C) Income Policy. D) All of the above. Show Answer Correct Answer: D) All of the above. 9. Which of the following is not an addition to national income? A) Profits. B) Depreciation. C) Interest. D) Salaries. E) Wages. Show Answer Correct Answer: B) Depreciation. 10. An increase in government purchases will increase aggregate demand because A) The decline in the interest rate will increase demand. B) Government expenditures are a component of aggregate demand. C) Consumption expenditures are a component of aggregate demand. D) The decline in the price level will increase demand. Show Answer Correct Answer: B) Government expenditures are a component of aggregate demand. 11. How are the 7 Board of Governors put in power? A) The people vote upon each member. B) They are all appointed by the Senate. C) They are all appointed by the President and confirmed by the Senate. D) The people vote for only the chairman and he appoints his team. Show Answer Correct Answer: C) They are all appointed by the President and confirmed by the Senate. 12. A period of very low inflation would MOST likely lead to A) Higher tuition costs. B) Lower prices on books. C) More demand for college degrees. D) Less demand for skilled workers. Show Answer Correct Answer: B) Lower prices on books. 13. The relationship between speculative demand form money and interest is A) Directly proportional. B) Inverse. C) No relationship. D) Bi-directional and positive. Show Answer Correct Answer: B) Inverse. 14. Price where quantity supplied equals quantity demanded. A) Price floor. B) Equilibrium quantity. C) Equilibrium price. D) Price. Show Answer Correct Answer: C) Equilibrium price. 15. Equitable distribution of income is one of the problems of macroeconomics goal. A) FALSE. B) TRUE. Show Answer Correct Answer: A) FALSE. 16. How do interest rates impact MPS and MPC A) They change cost of borrowing for firms, this changes the amount banks have to have in their deposits. B) They change returns on savings. This changes incentive to save, and therefore how much households are willing to spend on consumption (MPC). C) They only impact MPS and not MPC, because they change incentive to save. D) They dont impact either, they only impact cost of loans. Show Answer Correct Answer: B) They change returns on savings. This changes incentive to save, and therefore how much households are willing to spend on consumption (MPC). 17. What are Porter's 5 Forces used for? A) Stock analysis. B) Price analysis. C) Industry analysis. D) Consumer analysis. Show Answer Correct Answer: C) Industry analysis. 18. The Federal Reserve has three primary goals. What does it mean to control inflation? A) To maintain stable prices. B) To ensure maximum employment. C) To increase production output. D) None of above. Show Answer Correct Answer: A) To maintain stable prices. 19. No tangible backing, but it is declared by the government that issues it, and accepted by citizens who use it, to have worth. A) Fiat Money. B) Representative Money. C) Commodity Money. D) Gold Standard. Show Answer Correct Answer: A) Fiat Money. 20. Which of the following occurs in a given year when a country's government runs a budget deficit? A) Debt owed to foreigners exceeds the debt owed to the country's citizens. B) Amount borrowed exceeds interest payment on the national debt. C) Tax revenues exceeds government spending. D) Government spending exceeds tax revenues. Show Answer Correct Answer: D) Government spending exceeds tax revenues. 21. Nominal interest rate-expected rate of price inflation A) Real interest rate. B) Real GDP. C) Nominal interest rate. D) Nominal GDP. Show Answer Correct Answer: A) Real interest rate. 22. The BNM can increase the money supply by conducting open market A) Sales and raising the discount rate. B) Sales and lowering the discount rate. C) Purchases and raising the discount rate. D) Purchases and lowering the discount rate. Show Answer Correct Answer: D) Purchases and lowering the discount rate. 23. Inflation causes exports to be more competitive A) True. B) False. Show Answer Correct Answer: A) True. 24. What are the automatic stabilisers in the economy? A) Fiscal policy Taxes Benefits. B) Budget DeficitTaxesTransfer Payments. C) TaxesBenefits. D) All correct. Show Answer Correct Answer: B) Budget DeficitTaxesTransfer Payments. 25. Adam Smith's Concept that individuals self-interested behavior can lead to positive social outcomes (Normative Statement ) A) The Art and Science of Respect. B) Think and Grow Rich. C) Rich Dad Poor Dad. D) Invisible hand. Show Answer Correct Answer: D) Invisible hand. 26. What should the company do when MPL > W/P? A) Firm should hire less L. B) Firm should hire more L. C) Firm should not hire L. D) Firm should hire the right amount of L. Show Answer Correct Answer: B) Firm should hire more L. 27. A four-sector economy is called ..... A) Simple economy. B) Open economy. C) Closed economy. D) Injection. Show Answer Correct Answer: B) Open economy. 28. Point "E" represents which phase of the business cycle? A) Trough. B) Recovery. C) Contraction. D) Peak. E) Expansion. Show Answer Correct Answer: C) Contraction. 29. The Federal Reserve wants to reduce the nation's money supply. This could be accomplished by doing all of the following EXCEPT: A) Increasing the reserve requirement. B) Selling securities on the open market. C) Decreasing the discount rate. D) Making banks hold a reserve for all type of deposits. Show Answer Correct Answer: C) Decreasing the discount rate. 30. Given the danger of bank runs, why do banks not keep the majority of deposits on hand to meet the demands of depositors? A) Banks do not keep the majority of deposits on hand because they are not aware of the potential risks of bank runs. B) Banks do not keep the majority of deposits on hand because they prefer to keep the money for themselves. C) Banks do not keep the majority of deposits on hand because they do not have the physical space to store the money. D) Banks do not keep the majority of deposits on hand because they use the funds to make loans and investments, which allows them to earn interest and generate profits. Show Answer Correct Answer: D) Banks do not keep the majority of deposits on hand because they use the funds to make loans and investments, which allows them to earn interest and generate profits. ← 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