This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 6 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Sum of the employed and the unemployed A) Employed. B) Unemployment. C) Labor Force. D) None of above. Show Answer Correct Answer: C) Labor Force. 2. An improvement in the technology used in the production of automobiles and an increase in the need for automobile transportation will most likely cause the price and quantity of automobiles to change in which of the following ways? A) Increase Price; Increase Quantity. B) Decrease Price; Decrease Quantity. C) Increase Price; Indeterminate Quantity. D) Indeterminate Price; Increase Quantity. Show Answer Correct Answer: D) Indeterminate Price; Increase Quantity. 3. Unemployment ..... during recession and ..... during expansion A) Rises, rises. B) Falls, rises. C) Falls, falls. D) Rises, falls. Show Answer Correct Answer: D) Rises, falls. 4. When taxes are equal to government spending this leads to a: A) Budget Deficit. B) Budget Shortage. C) Budget Surplus. D) Balanced Budget. Show Answer Correct Answer: D) Balanced Budget. 5. How many FRQ questions will appear on the AP Micro exam? A) 30. B) 2. C) 1. D) 3. Show Answer Correct Answer: D) 3. 6. A general rise in overall prices is called: A) Deflation. B) Inflation. C) Federal Reserve. D) Consumer Price Index. Show Answer Correct Answer: B) Inflation. 7. Who is in charge of Monetary Policy A) The Government. B) Banko Central ng Pilipinas. C) Land Bank of the Philippines. D) The Department of the Treasury. Show Answer Correct Answer: B) Banko Central ng Pilipinas. 8. The term "money" is used in economics in a very specific way. Which of these is NOT a correct use of this term from an economics perspective? A) Money overcomes the "double coincidence of wants.". B) Someone with a well-paying job in the financial sector "makes a lot of money.". C) "I don't trust banks, so my money is under my mattress.". D) "How can you tell me that I don't have any money in my checking account when I still have checks left in my checkbook?. E) These are all correct usages of the term "money.". Show Answer Correct Answer: B) Someone with a well-paying job in the financial sector "makes a lot of money.". 9. The total supply of goods and services available to a particular market from producers A) Aggregate Demand. B) Aggregate Supply. C) Demand. D) Supply. Show Answer Correct Answer: B) Aggregate Supply. 10. The ..... is the government's debt as a percentage of GDP. A) GDP Debt. B) Government Debt. C) Public Debt. D) Debt-GDP Ratio. Show Answer Correct Answer: D) Debt-GDP Ratio. 11. Which of the following is primarily responsible for the control of the money supply? A) The Federal Deposit Insurance Corporation. B) The Federal Reserve System. C) The United States Treasury. D) The comptroller of the Currency. Show Answer Correct Answer: B) The Federal Reserve System. 12. Increasing reserve requirements is used to ..... A) Fight recession. B) Stop inflation. Show Answer Correct Answer: B) Stop inflation. 13. Is this counted in the GDP of the US?The federal government purchases a new submarine for the US Navy. A) Yes. B) No. Show Answer Correct Answer: A) Yes. 14. Consumption Theory with Permanent Income Hypothesis according to Friedman is divided into..... A) 4. B) 5. C) Nothing is true. D) 3. E) 2. Show Answer Correct Answer: E) 2. 15. This economist argued that, under capitalism, the owners o the means of production and accumulated profits by exploiting their workers, and predicted that once the workers became sufficiently numerous and " immigrated, " they would eventually revolt and overturn the capitalist system A) Adam Smith. B) Karl Marx. C) John Maynard Keynes. D) Milton Friedman. Show Answer Correct Answer: B) Karl Marx. 16. Scarcity exists because A) Innovation causes unemployment. B) Physical capital does not depreciate. C) Human wants exceed the productive capacities of the economy. D) Supplies of land and other natural resources are unlimited. Show Answer Correct Answer: C) Human wants exceed the productive capacities of the economy. 17. Your employer withholds part of your income and sends it to the government to pay your taxes A) Excise. B) Taxable Income. C) Gift. D) Pay-As-You-Earn. Show Answer Correct Answer: D) Pay-As-You-Earn. 18. What are the three goals of every economy? A) To measure growth, reduce unemployment, and keep prices stable. B) To measure the health of the economy, fix the economy, and promote international trade. C) To measure GDP, calculate inflation, and implement fiscal and monetary policy. D) To measure the health of the economy, reduce unemployment, and promote international trade. Show Answer Correct Answer: A) To measure growth, reduce unemployment, and keep prices stable. 19. Which of the following best describes commodity money? A) Received after the sale of a good. B) Value of commodity. C) Money value is equal to the commodity of which it's made. D) Used to buy commodities in the market. Show Answer Correct Answer: C) Money value is equal to the commodity of which it's made. 20. Expansionary monetary policy (increase in money supply) under floating exchange rates A) Shifts LM* leftlowers exchange rateraises income. B) Shifts LM* rightlowers exchange rateraises income. C) Shifts LM* leftlowers exchange ratelowers income. D) Shifts LM* rightlowers exchange ratelowers income. Show Answer Correct Answer: B) Shifts LM* rightlowers exchange rateraises income. 21. The interest rate that banks must pay on money borrowed from Regional Federal Reserve Banks is the A) Inflation rate. B) Federal funds rate. C) Reserve requirement. D) Discount rate. Show Answer Correct Answer: D) Discount rate. 22. These include institutions such as pension funds, life insurance companies, and banks. A) Financial Intermediaries. B) Mutual Funds. C) Stocks. D) Bonds. Show Answer Correct Answer: A) Financial Intermediaries. 23. The process of money creation or credit creation is done by A) Commercial banks. B) Rural bank. C) Central bank. D) World Bank. Show Answer Correct Answer: A) Commercial banks. 24. GDP, CPI and unemployment are A) Signs that the economy is peaking. B) Signs that the economy is in contraction. C) Economic indicators used to determine the state and direction of the economy. D) Elements of both monetary and fiscal policy to stabilize the economy. Show Answer Correct Answer: C) Economic indicators used to determine the state and direction of the economy. 25. Given a PP curve for defense goods and nondefense goods, if a nation is currently producing at a point inside the PP curve, then A) Only if new technology is available will the nation be able to increase production of defense or nondefense goods. B) It is possible to increase defense good production without sacrificing nondefense good production. C) The PP curve will start to shift to the left. D) Society is maximizing output from its limited supply of resources. Show Answer Correct Answer: B) It is possible to increase defense good production without sacrificing nondefense good production. 26. Inflation can best be defined as ..... A) A general increase in prices. B) An increase in prices of key items purchased by consumers. C) The printing of too much paper money. D) None of above. Show Answer Correct Answer: A) A general increase in prices. 27. If the CPI is 200 for the year 2010 and 300 today, then $ 600 in 2010 has the same purchasing power as ..... has today A) $ 900. B) $ 500. C) $ 700. D) $ 400. Show Answer Correct Answer: A) $ 900. 28. The total quantity of an economy's final goods and services demanded at different price levels is A) The aggregate supply curve. B) The aggregate demand curve. C) The Phillips curve. D) The aggregate expenditure function. Show Answer Correct Answer: B) The aggregate demand curve. 29. In the circular flow model, consumption goods are bought and sold in the A) Product market. B) Financial market. C) Government market. D) Resource market. Show Answer Correct Answer: A) Product market. 30. This economy would most likely have a dictator. A) Mixed. B) Communism. C) Capitalism. D) Socialism. Show Answer Correct Answer: B) Communism. ← PreviousNext →Related QuizzesEconomics QuizzesFinance QuizzesMacroeconomics Quiz 1Macroeconomics Quiz 2Macroeconomics Quiz 3Macroeconomics Quiz 4Macroeconomics Quiz 5Macroeconomics Quiz 7Macroeconomics Quiz 8Macroeconomics Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books