This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 88 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 88 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The economy is in a recessionary gap. What type of open market operation is appropriate? A) Decrease the reserve requirement. B) Increase the reserve requirement. C) Sell bonds. D) Buy bonds. Show Answer Correct Answer: D) Buy bonds. 2. Ygritte loaned Mans $ 100. Mans paid her back $ 110one year later. The annual rate of inflation was 3%.What was the real interest rate that Ygritte earned on this loan? A) 10%. B) 7%. C) $ 10. D) 3%. E) $ 100. Show Answer Correct Answer: B) 7%. 3. If the inflation rate is rising too fast, which fiscal policy would make MOST sense? A) Increase spending. B) Decrease bank reserves. C) Increase taxes. D) Decrease taxes. Show Answer Correct Answer: C) Increase taxes. 4. Choose the CORRECT answer for four (4) phases of business cycle. A) Peak, Profit, Decline, Bankruptcy. B) Peak, Recession, Expansion, Through. C) Expansion, Profits, Decline, Bankruptcy. D) Peak, Recession, Through, Recovery. Show Answer Correct Answer: D) Peak, Recession, Through, Recovery. 5. At what age are workers eligible for early retirement benefits through the Social Security system? A) 62. B) 55. C) 60. D) 65. Show Answer Correct Answer: A) 62. 6. How do automatic stabilizers work, both on the taxation side and on the spending side, in a situation where the economy is producing more than potential GDP? A) Automatic stabilizers decrease taxes and increase government spending to prevent overheating in an economy producing more than potential GDP. B) Automatic stabilizers have no effect on taxes and government spending in an economy producing more than potential GDP. C) Automatic stabilizers reduce taxes and increase government spending, exacerbating overheating in an economy producing more than potential GDP. D) Automatic stabilizers increase taxes and reduce government spending to prevent overheating in an economy producing more than potential GDP. . Show Answer Correct Answer: D) Automatic stabilizers increase taxes and reduce government spending to prevent overheating in an economy producing more than potential GDP. . 7. The ..... shows the relationship between the quantity of money supplied and the interest rate. A) Money Supply Curve. B) Money Demand Curve. C) Loanable Funds Market. D) Fisher Effect. Show Answer Correct Answer: A) Money Supply Curve. 8. Movement along a supply curve demonstrates A) A change in quantity supplied. B) A change in quantity demanded. C) A change in supply. D) A change in demand. Show Answer Correct Answer: A) A change in quantity supplied. 9. What part of the business cycle is labeled as #2 A) Trough. B) Contraction/Recession. C) Peak. D) Expansionary/Recovery. Show Answer Correct Answer: B) Contraction/Recession. 10. The expenditure by all levels of government on goods and services A) Imports of goods and services. B) Investment. C) Consumer expenditure. D) Government expenditure on goods and services. Show Answer Correct Answer: D) Government expenditure on goods and services. 11. 'Unemployment has begun to rise in the UK. What should policy makers do? Already the Bank of England has cut interest rates. Also, the government has begun to spend more without covering all of the increase by a rise in taxes.'It can be inferred from the data that in response to rising unemployment A) Both monetary policy and fiscal policy are expansionary. B) Monetary policy is expansionary whilst fiscal policy is contractionary. C) Monetary policy is contractionary whilst fiscal policy is expansionary. D) Both monetary policy and fiscal policy are contractionary. Show Answer Correct Answer: A) Both monetary policy and fiscal policy are expansionary. 12. A ..... tax, also referred to as a flat tax, impacts low-, middle-and high-income earners relatively equally. A) Regressive. B) Proportional. C) Income. D) None of above. Show Answer Correct Answer: B) Proportional. 13. In a recession, does the actual budget surplus or deficit fall above or below the standardized employment budget? A) Surplus. B) Standardized. C) Above. D) Below . Show Answer Correct Answer: D) Below . 14. A situation in which the government spends more than it takes in is? A) Deficit. B) Kick back. C) Overload. D) Surplus. Show Answer Correct Answer: A) Deficit. 15. Land includes ..... A) The "gifts of nature" or natural resources not created by human effort. B) The tools, equipment, and factories used in production of goods and services. C) People with all their efforts and abilities. D) Individuals who start a new business or bring a product to market. Show Answer Correct Answer: A) The "gifts of nature" or natural resources not created by human effort. 16. Which of the following is the best definition of opportunity costs? A) The amount of one good that must be given up in order to produce one more unit of another good. B) The amount of an input that must be used in order to produce one more unit of a good. C) The price of a good that must be charged in order for a merchant to sell one more unit. D) None of the above. Show Answer Correct Answer: A) The amount of one good that must be given up in order to produce one more unit of another good. 17. Which one is considered to be business fixed investment? A) Increase stock in warehouse. B) Buy a sharia mutual fund. C) Build a new factory plant. D) Build a new house. Show Answer Correct Answer: C) Build a new factory plant. 18. Does the sale of a 2018 automobile count toward the gross domestic product for the year 2019? A) Yes, of course. B) No, because the production did not occur that year. C) Yes, because all sales count toward GDP. D) No, because the sale would be considered a non-market activity. Show Answer Correct Answer: B) No, because the production did not occur that year. 19. John is a skilled blacksmith, but he is unable to find a job because the demand for blacksmiths has decreased due to technological advancements. What type of unemployment is John experiencing? A) Structural Unemployment. B) Cyclical Unemployment. C) Frictional Unemployment. D) Seasonal Unemployment. Show Answer Correct Answer: A) Structural Unemployment. 20. A decrease in the demand for money would result from: A) A decrease in the price level. B) An increase in nominal GDP. C) A decrease in the supply of money. D) An increase in real GDP. E) An increase in income. Show Answer Correct Answer: A) A decrease in the price level. 21. If the Australian dollar depreciates, the effect of this is likely to be: A) Exports will be more expensive. B) Imports will be cheaper. C) Import-competing domestic goods will be relatively expensive. D) 'imported inflation' may become a problem. Show Answer Correct Answer: D) 'imported inflation' may become a problem. 22. The Federal Reserve comes to the conclusion that more money must be pumped into the economy in order to pull the country out of a recession. Which actions could the "Fed" take that would most likely result in an increase the money supply? A) Raise the reserve requirements; raise the discount rate; and sell securities (bonds). B) Lower the reserve requirements; lower the discount rate; and buy securities (bonds). Show Answer Correct Answer: B) Lower the reserve requirements; lower the discount rate; and buy securities (bonds). 23. Britain:20 cars and 6 trucksUS:50 cars and 20 trucks Who has the comparative advantage in trucks? A) Britain. B) US. Show Answer Correct Answer: B) US. 24. THE MONEY THAT HOUSEHOLD SPEND WOULD BE BEST REPRESENTED FROM ..... to ..... A) Household to Factor Market. B) Household to Product Market. C) Product Market to Household. D) Household to Firms. Show Answer Correct Answer: B) Household to Product Market. 25. If the Fed wants to increase the money supply, it can ..... A) Reduce income tax rates. B) Buy bonds in open-market operations. C) Raise income tax rates. D) Sell bonds in open-market operations. Show Answer Correct Answer: B) Buy bonds in open-market operations. 26. GDP per capita is: A) Investment as a percentage of GDP. B) The same as GDP per worker. C) Total GDP divided by total population. D) The population divided by total GDP. Show Answer Correct Answer: C) Total GDP divided by total population. 27. One of the primary goals of stabilizing the economy is to A) Increase income levels. B) Maintain low unemployment. C) Raise the standard of living. D) Increase profits and spending. Show Answer Correct Answer: D) Increase profits and spending. 28. How do workers typically pay into the Social Security program in the United States? A) By mailing a check to the Social Security Administration. B) By paying a lump sum each year. C) Through payroll withholding at their job. D) Through income tax. Show Answer Correct Answer: C) Through payroll withholding at their job. 29. According to the Circular Flow chart, which of the following statements is true? A) Government receives its revenues only from the factor market. B) Government receives its revenues only from the product market. C) Government receives its revenues from transfer payments. D) Government receives its revenues from household and business taxes. Show Answer Correct Answer: D) Government receives its revenues from household and business taxes. 30. Net EXPORT is X-M. What is X? A) IMPORT. B) EXPORT. Show Answer Correct Answer: B) EXPORT. ← 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