This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 8 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. An increase in government spending will lead to? A) Decrease in AD. B) Increase in AS. C) Decrease in AS. D) Increase in AD. Show Answer Correct Answer: D) Increase in AD. 2. Which is an example of a NON-RENEWABLE resource? A) Trees. B) Soil. C) Animals. D) Fossil fuels. Show Answer Correct Answer: D) Fossil fuels. 3. Which of following is true when the output gap is negative? A) Aggregate output is above potential output. B) The unemployment rate is below the natural rate. C) The economy is experiencing inflation. D) Potential output is above aggregate output. E) The natural rate of unemployment is decreasing. Show Answer Correct Answer: D) Potential output is above aggregate output. 4. What is firm's sector? A) All consumers in the whole world. B) Amount of money firm's make. C) The part of the economy containing all for-profit firms that aren't owned by government. D) None of the above. Show Answer Correct Answer: D) None of the above. 5. Which of the following is a policy used by the central bank to control the amount of money in the economy? A) Monetary policy. B) Monetary policy. C) Free trade policy. D) All the points are correct. Show Answer Correct Answer: A) Monetary policy. 6. It is generally used to mean any sustained or continuing increase in price. A) Inflation. B) Per capita income. C) Hyperinflation. D) Net increase in stock. Show Answer Correct Answer: A) Inflation. 7. Shortest lifespan A) Corporation. B) Sole Proprietorship. C) Partnership. D) Limited Liability Partnership. Show Answer Correct Answer: B) Sole Proprietorship. 8. Supply-side economists argue that A) A cut in high tax rates results in an increased deficit and thus increases aggregate supply. B) Lower tax rates provide positive work incentives and thus shift the aggregate supply curve to the right. C) The aggregate supply of goods can only be increased if the price level falls. D) Increased government spending should be used to stimulate the economy. E) The government should regulate the supply of imports. Show Answer Correct Answer: B) Lower tax rates provide positive work incentives and thus shift the aggregate supply curve to the right. 9. In one year, spending on consumption, investment, and government purchases was equal to 103 percent of a country's gross domestic product. This would be possible only if A) Net exports were negative. B) The money supply increased. C) The government ran a budget surplus. D) Net exports were positive. E) The government had a balanced budget. Show Answer Correct Answer: A) Net exports were negative. 10. What is happening to the economy in a period of economic contraction? A) GDP is rising and unemployment is falling. B) GDP is rising and unemployment is rising. C) GDP is falling and unemployment is rising. D) GDP is falling and unemployment is falling. Show Answer Correct Answer: C) GDP is falling and unemployment is rising. 11. Unemployed because employers need their type of human capital during only one part of the year. A) Cyclical. B) Structural. C) Frictional. D) Seasonal. Show Answer Correct Answer: D) Seasonal. 12. A major advantage of automatic stabilizers in fiscal policy is that they A) Reduce the public debt. B) Increase the possibility of a balanced budget. C) Stabilize the unemployment rate. D) Go into effect without passage of new legislation. E) Automatically reduce the inflation rate. Show Answer Correct Answer: D) Go into effect without passage of new legislation. 13. . How do the expansionary and contractionary monetary policy affect the quantity of money? A) Expansionary and contractionary monetary policy have no effect on the quantity of money. B) Contractionary monetary policy increases the quantity of money. C) Expansionary monetary policy decreases the quantity of money. D) Expansionary monetary policy increases the quantity of money, while contractionary monetary policy decreases the quantity of money. Show Answer Correct Answer: D) Expansionary monetary policy increases the quantity of money, while contractionary monetary policy decreases the quantity of money. 14. The government implements contractionary monetary policy when recession occurs. A) FALSE. B) TRUE. Show Answer Correct Answer: B) TRUE. 15. The transaction demand for money is very closely associated with money's use as a A) Store of value. B) Standard unit of account. C) Measure of value. D) Medium of exchange. E) Standard of deferred payment. Show Answer Correct Answer: D) Medium of exchange. 16. Seasonal unemployment A) Describes recent college graduates. B) Slows the economy Slows the economy. C) Is a result of changes in technology. D) Is predictable. Show Answer Correct Answer: D) Is predictable. 17. A market structure where a few businesses control the selling of a product ..... A) Pure or perfect competition. B) Monopolistic. C) Oligopoly. D) Monopoly. Show Answer Correct Answer: C) Oligopoly. 18. Canada has nationalized health care, so that everyone has some access to health care. Based on this, Canada has decided that "everyone, regardless of their ability to pay" is the answer to what microeconomic question? A) What type of health care will be produced and in what quantity?. B) How will health care be produced?. C) For whom will health care be produced?. D) Why will we offer health care?. Show Answer Correct Answer: C) For whom will health care be produced?. 19. When the US dollar depreciates, AD will? A) Increase. B) Decrease. C) Remain unchanged. D) None of above. Show Answer Correct Answer: A) Increase. 20. The actions of the FED that controls and regulate the amount of money in the economy are referred to as A) Opportunity costs. B) Fiscal policy. C) International trade. D) Monetary policy. Show Answer Correct Answer: D) Monetary policy. 21. What happens to a nation's imports or exports of a product when the world price of the product rises above the domestic price? A) Exports of the product decrease. B) Imports of the product stay the same. C) Exports of the product increase. D) Imports of the product increase. Show Answer Correct Answer: C) Exports of the product increase. 22. A simple consumption theory only bases the size of consumption on the size of income, even though consumption expenditure is also influenced by: A) Wealth level, Socioeconomic, Price level. B) Socioeconomic, Price level, Tastes. C) Price level, Tastes, Interest rate. D) All wrong. E) All true. Show Answer Correct Answer: E) All true. 23. All of the following are components of GDP Except A) C-consumer. B) I-Business and Investment. C) G-Government. D) X-Net Foreign Investments. E) L-Labor. Show Answer Correct Answer: E) L-Labor. 24. Inventories rise when: A) Actual demand for output is more than expected. B) Actual demand for output is less than expected. C) Actual supply of output is less than expected. D) Actual demand for output is about the same as expected. Show Answer Correct Answer: B) Actual demand for output is less than expected. 25. What is a microeconomic decision? A) A gas firm reducing its prices. B) A government increasing income tax. C) A central bank reducing interest rates. D) A government increasing the national minimum wage. Show Answer Correct Answer: A) A gas firm reducing its prices. 26. Congress almost approved a $ 400 million project to build a "bridge to nowhere" in Alaska back in 2005. This is an example of ..... spending. A) Pork. B) Chicken. C) Beef. D) Spam. Show Answer Correct Answer: A) Pork. 27. Which of the following statements do not apply to investment in new technology? A) It involves encouraging spending on R&D. B) It has no impact on AD, but shifts AS to the right. C) Funding for maths, science and technology education is an example of such investment. D) It includes permitting tax credits for firms that invest in R&D. Show Answer Correct Answer: B) It has no impact on AD, but shifts AS to the right. 28. The price of one nation's currency expressed in terms of another's currency is called A) Exchange rate. B) World price. C) Purchasing power parity. D) Terms of trade. Show Answer Correct Answer: A) Exchange rate. 29. Identify which items below are correctly is not correctly matched A) Labor sold by households = Product Market. B) Computers bought by households = Product Market. C) Computers sold by businesses = Product Market. D) Labor sold by households = Resource Market. Show Answer Correct Answer: A) Labor sold by households = Product Market. 30. Refers to government revenue, spending, and debt A) Fractional Reserve Banking. B) Fiscal. C) Reserve system. D) Legal Reserves. Show Answer Correct Answer: B) Fiscal. ← PreviousNext →Related QuizzesEconomics QuizzesFinance QuizzesMacroeconomics Quiz 1Macroeconomics Quiz 2Macroeconomics Quiz 3Macroeconomics Quiz 4Macroeconomics Quiz 5Macroeconomics Quiz 6Macroeconomics Quiz 7Macroeconomics Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books