This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 66 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 66 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The United States buys more goods and services than it sells. This is an example of an ..... A) Interdependence. B) Unfavorable Balance of Trade. C) Comparative Advantage. D) Favorable Balance of Trade. Show Answer Correct Answer: B) Unfavorable Balance of Trade. 2. GDP is in the process of declining during a(an) A) Contraction. B) Trough. C) Expansion. D) Peak. Show Answer Correct Answer: A) Contraction. 3. It refers to the analysis of the general movement of the economy. A) Microeconomics. B) Economics. C) Macroeconomics. D) Ergonomics. Show Answer Correct Answer: C) Macroeconomics. 4. M2 refersto to a broaders definition of money supply and consists of M1 and near money. A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 5. This occurs when aggregate output is above potential output. A) LRAS shifts down. B) Inflationary Gap. C) LRAS shifts on the z-axis. D) Recessionary Gap. Show Answer Correct Answer: B) Inflationary Gap. 6. In the short run, policy that changes aggregate demand changes A) Both unemployment and the price level. B) Neither unemployment nor the price level. C) Only unemployment. D) Only the price level. Show Answer Correct Answer: A) Both unemployment and the price level. 7. This group is responsible for implementing fiscal policy A) U.S. Congress. B) Federal Reserve Board. C) Council of Economic Advisors. D) Supreme Court. Show Answer Correct Answer: A) U.S. Congress. 8. What is the "liquidity trap" in the context of the IS-LM model? A) A situation where the LM curve is vertical. B) A situation where changes in the money supply have no effect on interest rates. C) A situation where fiscal policy is ineffective. D) A situation where interest rates are very high. Show Answer Correct Answer: A) A situation where the LM curve is vertical. 9. What is one disadvantage of capitalism? A) Promotes environmental protection. B) Can lead to inequality and exploitation. C) Encourages government intervention in the economy. D) Ensures equal distribution of wealth. Show Answer Correct Answer: B) Can lead to inequality and exploitation. 10. TRUE or FALSE:The OECD's "Better Life Index" is an example for a composite indicator of well-being. A) FALSE. B) TRUE. Show Answer Correct Answer: B) TRUE. 11. Which of the following is true about a country's national debt? A) It is the sum of the country's trade deficit and government budget deficit. B) It increases when gross domestic product increases. C) It increases when the country's government has a budget deficit. D) It decreases when the country's exports exceed its imports. E) It decreases when national savings decrease. Show Answer Correct Answer: C) It increases when the country's government has a budget deficit. 12. Mark always changes his own oil. Is this effort counted in GDP? A) No-Unreported Income. B) No-Non-market Activity. C) No-Black Market. D) No-Purely financial transaction. Show Answer Correct Answer: B) No-Non-market Activity. 13. ..... the relationship between quantity of inputs used to make a good and the quantity of output of that good. A) Externality. B) Capital. C) Production function. D) None of above. Show Answer Correct Answer: C) Production function. 14. Sticky price model SRAS eq A) Y=Y.-a(P-EP). B) Y=Y.+a(EP-P). C) Y=Y.+a(P-EP). D) Y=Y+a(P-EP). Show Answer Correct Answer: C) Y=Y.+a(P-EP). 15. If the Federal Reserve raises interest rates to combat rapid inflation, what might be a negative outcome? A) International trade would stop. B) Unemployment rates would rise. C) Taxes will rise. D) The government would put a freeze on prices. Show Answer Correct Answer: B) Unemployment rates would rise. 16. The general rise in prices is known as: A) Unemployment Rate. B) Inflation. C) Expansion. D) Business Cycle. Show Answer Correct Answer: B) Inflation. 17. Which of the following people would count towards the labor force? A) Peter is a homemaker with 4 children. B) Kiley is retired and now volunteers her time to the local library. C) Lawrence is 15 and can't wait to get his first job. D) Aaron works a few hours a week bartending. Show Answer Correct Answer: D) Aaron works a few hours a week bartending. 18. Which of the following is MOST likely to promote economic growth? A) A decrease in business tax credits for investment spending. B) A decrease in federal student education grants. C) An increase in investment in tools and machinery. D) A decrease in the labor force participation rate. Show Answer Correct Answer: C) An increase in investment in tools and machinery. 19. Which type of unemployment occurs when individuals are in between jobs? A) Frictional unemployment. B) Cyclical unemployment. C) Structural unemployment. D) Seasonal unemployment. Show Answer Correct Answer: A) Frictional unemployment. 20. The American Recovery and Reinvestment (ARRA) of 2009 was destined to combat which of the following types of unemployment? A) Seasonal Unemployment. B) Structural Unemployment. C) Frictionally Unemployment. D) Cyclical Unemployment. Show Answer Correct Answer: D) Cyclical Unemployment. 21. When the FED raises interest rates, banks will ..... interest rates on loans. A) Decrease. B) Increase. Show Answer Correct Answer: B) Increase. 22. Which term is used to describe a company's ability to produce a good at a lower opportunity cost than another company? A) Non-structural barrier. B) Trade imbalance. C) Comparative advantage. D) Absolute Advantage. Show Answer Correct Answer: C) Comparative advantage. 23. A Toyota Innova car is sold for IDR 240, 000, 000 in Indonesia, then exported to Saudi Arabia for a price there of 72, 000, 000 Saudi Riyals. Assuming purchasing power parity theory is met, what is the nominal exchange rate (Riyals per Rupiah)? A) 3.33. B) 0, 3. C) 3. D) 0, 33. Show Answer Correct Answer: B) 0, 3. 24. Cisco Systems purchased new wireless network for their plant. Bob was fired from his job laying down wire in the factory, because his skills were no longer needed. Bob was looking for a job laying wires for other companies, but it seems they have all gone wireless. Bob is experiencing which type of unemployment? A) Seasonal Unemployment. B) Frictional Unemployment. C) Structural Unemployment. D) Cyclical Unemployment. Show Answer Correct Answer: C) Structural Unemployment. 25. Which of the following jobs would be considered seasonal? A) Part-time veterinary tech. B) Cashier at a grocery store. C) Snow plow driver. D) Traveling nurse. Show Answer Correct Answer: C) Snow plow driver. 26. The equation of exchange can be written as A) M X Q = P X V. B) Q X M = P X V. C) M X V = P X Q. D) M X P = V X Q. Show Answer Correct Answer: C) M X V = P X Q. 27. What causes cost-push inflation? A) An increase in demand. B) A fall in the price of imports. C) A rise in production costs passed on to consumers. D) None of above. Show Answer Correct Answer: C) A rise in production costs passed on to consumers. 28. At the existing price, the quantity demanded exceeds the quantity supplied; also called a shortage A) Shortage. B) Factors of Production. C) Excess Supply. D) Excess Demand. Show Answer Correct Answer: D) Excess Demand. 29. What is included in the monetary base? A) All deposits in banks and money in circulation. B) Money held in bank vaults and money held by the public. C) Any asset of any value including cash, stocks, and bonds. D) Only paper currency and coins. E) Only money held by the public. Show Answer Correct Answer: B) Money held in bank vaults and money held by the public. 30. When the economy is moving in the right direction and is associated with the opening of new businesses, new technology and capital, more productive workers in knowledge and skills. A) Economic Growth. B) Price Stability. C) Full Employment. D) None of above. Show Answer Correct Answer: A) Economic Growth. ← 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