This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Macroeconomics – Quiz 96 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Macroeconomics Quiz 96 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Phillips curve with adaptive expectations A) $\pi=\pi_{-1}-\beta\left(u+u^n\right)+v$. B) $\pi=\pi_{-1}-\beta\left(u-u^n\right)+v$. C) $\pi=\pi_{-1}+\beta\left(u-u^n\right)+v$. D) $\pi=\pi_{+1}-\beta\left(u-u^n\right)+v$. Show Answer Correct Answer: B) $\pi=\pi_{-1}-\beta\left(u-u^n\right)+v$. 2. Use the news headline to answer the question.Navy orders two Ford class aircraft carriers for $ 26 Billion. How will this development affect the gross domestic product? A) It will rise due to increased consumer spending. B) It will fall due to increased consumer spending. C) It will rise due to increased government spending. D) It will fall due to increased government spending. Show Answer Correct Answer: D) It will fall due to increased government spending. 3. What is the liquidity trap? A) It is when monetary policy does not affect the product because interest rates are very low. B) It is when monetary policy does not affect the product because interest rates are very high. C) It is when fiscal policy does not affect the product because interest rates are very low. D) It is when fiscal policy does not affect the product because interest rates are very high. Show Answer Correct Answer: A) It is when monetary policy does not affect the product because interest rates are very low. 4. The GDP of the United States is the ..... in the entire world at ~$ 19.4 trillion. A) Highest. B) Lowest. C) Dumbest. D) Best smelling. Show Answer Correct Answer: A) Highest. 5. If the government implements an expansionary fiscal policy, what action can the central bank take to maintain a stable interest rate? A) Increase the required reserve ratio. B) Buy government bonds. C) Sell government bonds. D) Decrease personal income tax rates. E) Increase personal income tax rates. Show Answer Correct Answer: B) Buy government bonds. 6. When quantity supplied is not equal to quantity demanded means we have: A) Surplus. B) Disequilibrium. C) Shortage. D) Equilibrium. Show Answer Correct Answer: B) Disequilibrium. 7. Australia largely exports ..... and imports ..... A) Manufactured goods; primary commodities. B) Services; manufactured goods. C) Manufactured goods; services. D) Primary commodities and mineral products; manufactured goods. Show Answer Correct Answer: D) Primary commodities and mineral products; manufactured goods. 8. The M1 measure of the money supply primarily consists of which of the following A) Checking accounts and credit cards. B) Noncheckable savings and credit cards. C) Currency in circulation and checkable bank deposits. D) Noncheckable savings and small-denomination time deposits. E) Savings bonds and savings accounts. Show Answer Correct Answer: C) Currency in circulation and checkable bank deposits. 9. Open market operations are A) The processes by which money enters into circulation. B) Reserves greater than the required amounts. C) The buying and selling of government securities to alter the supply of money. D) Rates of interest banks charge on short-term loans to their best customers. Show Answer Correct Answer: C) The buying and selling of government securities to alter the supply of money. 10. To produce or make something you need this part of the four factors of production A) Land. B) Labor. C) Capital. D) Entrepreneurship. Show Answer Correct Answer: B) Labor. 11. The main tool for economic stabilization policy is A) Monetary policy because it has more lag time. B) Monetary policy because it has less lag time. C) Fiscal policy because it has less lag time. D) Fiscal policy because it has more lag time. Show Answer Correct Answer: B) Monetary policy because it has less lag time. 12. Labor force is the number of people, who are A) Working. B) Between 15 and 75 years old. C) Active in the labor market. D) Looking for a job. Show Answer Correct Answer: C) Active in the labor market. 13. Which of the following would be included as a liability on a commercial bank's balance sheet? A) Consumer loans. B) Demand deposits. C) Net worth. D) Bank reserves. Show Answer Correct Answer: B) Demand deposits. 14. When the Federal Reserve sells government securities, or bonds, on the open market, what effect does this action have on the economy? A) Increases money supply; increases consumer demand. B) Increases money supply; reduces inflation risk. C) Decreases money supply; increases consumer demand. D) Decreases money supply; reduces inflation risk. Show Answer Correct Answer: D) Decreases money supply; reduces inflation risk. 15. The determination of price and the behavior of individual markets are studied in ..... On the other hand, topic such as business cycles unemployment and inflation are studied in ..... A) Macroeconomics:microeconomics. B) Demand:supply analysis. C) Microeconomics:macroeconomics. D) None of the above. Show Answer Correct Answer: C) Microeconomics:macroeconomics. 16. In a boom, a government should usually: A) Increase taxes and increase government spending. B) Increase taxes and decrease government spending. C) Decrease taxes and increase government spending. D) Decrease taxes and decrease government spending. Show Answer Correct Answer: B) Increase taxes and decrease government spending. 17. Which is Not the effect of Balance of payment deficit? A) Increase income of the country. B) Increase indebtedness. C) Reduce aggregate demand for goods and services. D) None of above. Show Answer Correct Answer: A) Increase income of the country. 18. The central bank of the United States that sets policies designed to control the money supply is called the A) Bank of the United States of America. B) Federal Reserve. C) Congressional bank. D) Bank of Governors. Show Answer Correct Answer: B) Federal Reserve. 19. If Real GDP, Aggregate Demand, and Aggregate Supply are rising then the economy is ..... A) Experiencing Growth. B) Experiencing Decline. C) No change in the economy. D) None of above. Show Answer Correct Answer: A) Experiencing Growth. 20. The Phillips Curve represents the tradeoff between A) Inflation and unemployment. B) Price and quantity demanded. C) Price level and GDP. D) Two production options. Show Answer Correct Answer: A) Inflation and unemployment. 21. The minimum wage is an example of price floor. A) False. B) True. Show Answer Correct Answer: B) True. 22. Suppose that a country's nominal gross domestic product (GDP) was $ 1, 000 in year 1 and $ 2, 000 in year 2. If year 1 is the base year and real (GDP) in year 2 was $ 1, 000, which of the following is true? A) Prices fell by 50% between year 1 and year 2. B) Prices doubled between year 1 and year 2. C) Prices remained the same between year 1 and year 2. D) More goods and services were produced in year 2 than in year 1. E) Fewer goods and services were produced in year 2 than in year 1. Show Answer Correct Answer: B) Prices doubled between year 1 and year 2. 23. The percentage of people not working is known as ..... A) Real GDP. B) Full Employment. C) Economic Growth. D) Unemployment rate. Show Answer Correct Answer: D) Unemployment rate. 24. The aggregate demand curve is downward sloping because A) A lower price level, holding the nominal quantity of money constant, leads to a larger quantity of money in real terms, causes the interest rate to fall, and stimulates planned investment spending. B) A lower price level, holding the nominal quantity of money constant, leads to a larger quantity of money in nominal terms, causes the interest rate to rise, and stimulates planned investment spending. C) A higher price level, holding the nominal quantity of money constant, leads to a larger quantity of money in real terms, causes the interest rate to fall, and stimulates planned investment spending. D) A higher price level, holding the nominal quantity of money constant, leads to a smaller quantity of money in real terms, causes the interest rate to fall, and stimulates planned investment spending. Show Answer Correct Answer: A) A lower price level, holding the nominal quantity of money constant, leads to a larger quantity of money in real terms, causes the interest rate to fall, and stimulates planned investment spending. 25. The money that local and national states spend in; roads, schools, defense, sports, culture. A) Government Network. B) Government Spending. C) Multinational Investments. D) Macroeconomics Theories. Show Answer Correct Answer: B) Government Spending. 26. Steady economic growth, stable prices, and full employment A) Economic goals. B) Economics gains. Show Answer Correct Answer: A) Economic goals. 27. The group that is in charge of setting the policy for Open Market Operations: A) Board of Governors. B) Federal Open Market Committee. C) The Federal Reserve Banker. D) None of the above. Show Answer Correct Answer: B) Federal Open Market Committee. 28. Competitive market A) Markets that are characterized by many buyers and many sellers. B) Resources are of equal quality and equally suited for the production of both commodities. C) The ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors. D) A model that shows the flow of goods and services and the interaction among households, businesses, and banks. Show Answer Correct Answer: A) Markets that are characterized by many buyers and many sellers. 29. What factor NOT determine the labor demand? A) Influx in labor. B) Increase in marginal productivity of labor. C) Increase in price. D) Output required by the market. Show Answer Correct Answer: A) Influx in labor. 30. Budget deficits occur when ..... A) More money is being spent on welfare programs than has been allocated to those entities. B) The government is spending more than it collects in taxes in a fiscal year. C) Extreme levels of unemployment prevents normal tax collection rates. D) When interest rates promotes saving rather than spending. Show Answer Correct Answer: B) The government is spending more than it collects in taxes in a fiscal year. ← 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