This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 86 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 86 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The amount of goods and services a unit of money can buy. A) Steady economic growth. B) Purchasing Power. C) Stable Prices. D) Interest rates. Show Answer Correct Answer: B) Purchasing Power. 2. Which of the following could explain the shifts shown in the graph below? A) A decrease in government spending. B) A decrease in investor confidence. C) An adverse supply shock. D) A rise in people's expectations of inflation. E) A rise in the ECB's target inflation rate. Show Answer Correct Answer: C) An adverse supply shock. 3. If the government's total revenues are more than its total expenditure, it is called a ..... A) Surplus budget. B) Balanced budget. C) Deficit budget. D) Trade surplus. Show Answer Correct Answer: A) Surplus budget. 4. How do countries use Real GDP to calculate growth? A) By adding the sum all GDP percentages and equaling 100. B) By calculating the percentage change from one period of time to another. C) By subtracting one years GDP from the next. D) They use nominal not real GDP to calculate growth. Show Answer Correct Answer: B) By calculating the percentage change from one period of time to another. 5. The P in the equation of exchange represents that A) Profit earned in the economy. B) Average level of prices of final goods and services in the economy or the price deflator. C) Marginal level of prices. D) Marginal propensity to spend. Show Answer Correct Answer: B) Average level of prices of final goods and services in the economy or the price deflator. 6. Which of the following terms is also known as total output? A) Price index. B) Price level. C) Aggregate demand. D) Aggregate supply. Show Answer Correct Answer: D) Aggregate supply. 7. Exchanging goods and services for other goods and services A) Money. B) Stealing. C) Barter. D) Trade. Show Answer Correct Answer: C) Barter. 8. Which of the following is not true about final goods? A) Final gods satisfy the wants of ultimate consumers and producers. B) Final goods have direct demand as they satisfy the wants directly. C) Final goods are subject to further transformation in the process of production. D) Final goods are neither used up as raw material nor for resale in the same year. Show Answer Correct Answer: C) Final goods are subject to further transformation in the process of production. 9. The short-run effect of an increase in aggregate demand is an increase in output and an increase in the price level A) True. B) False. Show Answer Correct Answer: A) True. 10. True or False:Federal spending has grown substantially in recent decades. A) True . B) False. Show Answer Correct Answer: A) True . 11. ..... occurs in the economy when unemployment and inflation are both high. A) Deflation. B) Disinflation. C) Hyperinflation. D) Stagflation. Show Answer Correct Answer: D) Stagflation. 12. The idea of government intervention to help in a financial crisis was proposed by which economist? A) Adam Smith. B) Keynes. C) Maslow. D) Friedman. Show Answer Correct Answer: B) Keynes. 13. The market price of a product or service is determined by the forces of supply and demand. A) False. B) True. Show Answer Correct Answer: B) True. 14. Santa's helpers in July would represent A) Structural unemployment. B) Frictional unemployment. C) Seasonal unemployment. D) Cyclical unemployment. Show Answer Correct Answer: C) Seasonal unemployment. 15. If the FED decided to increase the money supply this is most likely because the economy has A) A large amount of government spending. B) An inflationary gap. C) Extremely low interest rates. D) High unemployment. Show Answer Correct Answer: D) High unemployment. 16. In general, the higher the potential return on an investment, the riskier the investment. A) True. B) False. Show Answer Correct Answer: A) True. 17. Full employment is one of macroeconomics goal. A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 18. An example of a proportional tax would be A) A flat rate income tax. B) A local property tax. C) A state sales tax. D) The current U.S. income tax. Show Answer Correct Answer: A) A flat rate income tax. 19. An acceptable example of economic regulation, a characteristic of a government in a mixed economy, include which of the following: A) Restricting how much a CEO can be compensated. B) Minimum wage laws. C) Limiting the number of clothing producers in an economy. D) Requiring car manufacturers to only produce cars in one color. Show Answer Correct Answer: B) Minimum wage laws. 20. George is moving to New York and, as a result, has no job. This is an example of ..... A) Cyclical unemployment. B) Frictional unemployment. C) Structural unemployment. D) Seasonal unemployment. Show Answer Correct Answer: B) Frictional unemployment. 21. Which of these policies is likely to have the longest time lag? A) Deregulation. B) Privatisation of nationalised firms. C) Reducing the minimum wage. D) Education. Show Answer Correct Answer: D) Education. 22. A form of unemployment reflecting the voluntary leaving or being fired of a job and searching for a new one A) Cyclically unemployment. B) Seasonal unemployment. C) Frictional Unemployment. D) Structural unemployment. Show Answer Correct Answer: C) Frictional Unemployment. 23. A ..... is a reduction in the value of a currency that is set under a fixed exchange rate regime. A) Devaluation. B) Revaluation. C) Valuation. D) None of above. Show Answer Correct Answer: A) Devaluation. 24. What is a series of cycles of economic expansion? A) Fire Cycle. B) Air Cycle. C) Business Cycle. D) Water Cycle. Show Answer Correct Answer: C) Business Cycle. 25. LM curve in Mundell-Fleming model A) Vertical. B) Horizontal. C) Upward sloping. D) Downward sloping. Show Answer Correct Answer: A) Vertical. 26. Efficency wages are wages that employers set above the equilibrium wage rate as an incentive for better employee performance. A) True. B) False. Show Answer Correct Answer: A) True. 27. Which of the points in the graph is associated with the peak of business cycle? A) Point C. B) Point D. C) Point B. D) Point A. Show Answer Correct Answer: C) Point B. 28. The relationship between price and the quantity demanded of a certain good or service A) Demand. B) Law of Demand. C) Supply. D) Equilibrium Quantity. Show Answer Correct Answer: A) Demand. 29. If a checking account has an interest rate of 1% and a government bond has an interest rate of 2%, the opportunity cost of holding the checking account as money is: A) 0%. B) 3%. C) 2%. D) -1%. E) 1%. Show Answer Correct Answer: E) 1%. 30. If the government wants to contract aggregate demand, it can ..... government purchases or ..... taxes. A) Decrease, decrease. B) Increase, increase. C) Decrease, increase. D) Increase, decrease. Show Answer Correct Answer: C) Decrease, increase. ← 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