Macroeconomics MCQ Questions Answers

1. Covered interest arbitrage moves the market ________ equilibrium because ________.

2. If the economy is in a recessionary gap, actual output will be _____ potential output.

3. Everything else held constant, a decrease in net taxes ________ aggregate ________.

4. During a business cycle expansion, total production ________ and total employment ________.

5. The _____in an economy whose aggregate real output is growing faster than the total population.

6. A recessionary gap exists if (actual) real gdp is __________ natural real gdp.

7. A downward-moving gdp indicates that ________.

8. ________ a nation's production possibilities frontier represents economic growth.

9. The discount rate is kept ________ the federal funds rate because the fed prefers that

10. On average, since 1900 u.s. output has grown by roughly ____ percent per year.

11. Structural unemployment usually lasts ________ period of time ________ unemployment

12. The ____________________ in an ad/as diagram is most relevant to say?s law.

13. In general, banks make profits by selling ________ liabilities and buying ________ assets.

14. The federal reserve generally uses ___________________ to implement monetary policy.

15. Gdp equals aggregate income and also equals aggregate expenditure because _______.

16. With _____________ demand the price changes, but the amount purchased remains the same.

17. When firms agree to act as a monopoly and set prices they are called __________.

18. When the fed buys bonds, its demand _____ the price of bonds, _____ nominal interest rates.

19. When the demand of a product increases ______

20. Refer to the table. exports might be ____ and imports ____.

21. The quantity of real gdp supplied depends on all of the following except the _______.

22. When the interest rate is high, planned investment is ________ so output is ________.

23. When an economy is expanding, unemployment tends to _____ and overall prices tend to _____.

24. Use the following data to answer the question: Y=$8,000 C = $6,200 I= $1,500 G = $1,500 NX = -$500 the unplanned change in inventories is ________ and real gdp will ________.

25. The apc is the amount of _____________ divided by the amount of income at a specific point.

26. Nominal gdp differs from real gdp because _____.

27. If the number of people in the labor force ________, then ________.

28. If the economy is currently in a recessionary gap, real gdp will be ________ potential output.

29. Gross domestic product and gross investment are measured _____.

30. Government expenditure ________ change potential gdp and taxes ________ change potential gdp.

31. Expansionary fiscal policy ________ the price level and ________ equilibrium real gdp.

32. Everything else held constant, when the price of a product increases _______

33. Domestic product is _______. national product is _______.

34. Decreasing government spending ________ the price level and ________ equilibrium real gdp.

35. "decreases in g will decrease the economy''s gdp by causing a(n) ________ in the ad.

36. At macroeconomic equilibrium, total ________ equals total ________.

37. An increase in income taxes ________ employment and ________ potential gdp.

38. A cut in taxes ________, therefore shifting the aggregate demand curve to the ________.

39. A change in the price level produces a ________ the aggregate demand curve. i. shift in ii. change in the slope of iii. movement along

40. When real gdp increases, the change in consumption expenditure equals _______.

41. A competitive market is a market that has _____, so _____ can influence the price.

42. Over time, potential gdp ________, which is shown by the ________ curve shifting to the right.

43. U.s. potential gdp is the value of the goods and services produced in the united states _______.

44. Supply-side economics is based on the theory that if taxes are reduced, _____.

45. Every day, we make many choices. we can't avoid having to make choices because _______.

46. Because of monopoly, consumers experience ________ than with perfect competition.

47. Management by ________ is the practice that directs executive attention to large budget variances.

48. Exchange rates, interest rates, and inflation are all considered part of the _________ environment.

49. When unskilled teens earn less than college graduates, society answers the ________ question.

50. When the economy goes into a recession, real gdp ________, and unemployment ________.

51. The vertical intercept of the consumption function equals ______ and the slope equals _____.

52. The 45-degree line in the keynesian model represents a set of points where _____ equals _____.

53. Physical capital is _______. financial capital is _______.

54. If mpc is 0.8, then the multiplier is _____.

55. Economists include the word final in the definition of gdp because we ____________.

56. A downward-moving gdp indicates that ________.

57. A rise in the price level produces a ________ the potential gdp line.

58. A rise in mpc makes the total expenditures (te) curve __________ and __________ the multiplier.

59. Improvements in _____ technology have helped make globalization possible.

60. An increase in ________ would lead to an increase in long-run economic growth.

61. Problem solving is to ____ as problem finding is to ____.

62. Bank deposits ______ and the quantity of money ______.

63. As interest rates rise, _____.

64. _____ is the increase in efficiency gained by producing more output without using more inputs.

65. All other things being equal, when the demand for money decreases _____

66. A nations nominal gross domestic product (gdp) _____.

67. Compared to personal computers, cell phones _____.

68. A currency drain ______ bank deposits and _______ bank reserves.

69. The fed's policy tools include all the following except _______.

70. According to classical growth theory, when real gdp per person ______, the population grows.

71. In the circular flow model, governments _______.

72. The aggregate demand curve shows the _____.

73. Refer to figure 2-1. ________ is (are) inefficient in that not all resources are being used.

74. When the economy is at full employment, _____ is zero.

75. The two main responsibilities of the federal reserve system are to ______ and to ______.

76. To create a macro, you can enter a series of commands in the _____ programming language.

77. Reserves consist of the currency in the _____ plus the balance on its _____ account at _____.

78. To _____ the money supply, the federal reserve could _____.

79. The rate of interest banks charge on short-term loans to their best customers is the _____.

80. The purpose of expansionary monetary policy is to increase _____.

81. The federal funds rate is the _____ rate on _____ loans.

82. The demand curve for federal funds is _____.

83. An open market purchase ______ the monetary base. an open market sale ______ the monetary base.

84. An increase in the money supply, all else held constant, usually _____.

85. A sale of treasury bills by the federal reserve _____ interest rates and _____ the money supply.

86. Both ________ and ________ are federal reserve assets

87. Unexpectedly high inflation ______ borrowers and ______ lenders.

88. When the labor market is in equilibrium, real gdp ________ potential gdp.

89. Increasing opportunity cost is represented by a ________ production possibilities frontier.

90. An increase in gdp per capita most likely means that _____.

91. When the price level decreases, _____.

92. When investment increases, the ________ in aggregate demand ________ the change in investment.

93. The real wage rate definitely falls if the money wage rate ________ and the price level ________.

94. The labels for the axes of an aggregate supply curve should be _____.

95. Tax cuts on business income ________ aggregate demand.

96. M1 is comprised of currency held outside banks + traveler's checks + __________.

97. If the gdp deflator is less than 100, then for that year nominal gdp ________ real gdp.

98. If prices fall, then real wealth __________ and the quantity of aggregate demand __________.

99. Aggregate demand ________ and shifts the ad curve ________ when ________.

100. A tax cut ________ aggregate demand and ________.