General Macroeconomics MCQs

1. What does GDP stand for?

2. GNP and GDP differ because:

3. What is it called when injections of cash in private banks by a central bank fail to lower interest rates?

4. The multiplier’s value can be found by using this formula.

5. If money growth does not affect real GDP, and velocity is stable, an increase in the money supply creates a proportional increase in

6. The term “Balance of Payments” means:

7. The formula for which of the following quantities contains a term for "Planned Investment?"

8. Negative income elasticity of demand is related to ?

9. The ratio of the change in national income to the change in government spending is called:

10. The government classification of a recession is:

11. What does raising interest rates and reducing the supply of money do?

12. What does PPF stand for in Economics?

13. The relationship between an economy's unemployment rate and its gross national product (GNP)

14. Which of the following would switch the aggregate demand curve to the right?

15. What is the unemployment rate when the economy is at potential GDP?

16. Which of these are a way of measuring production?

17. If the national output in one year is measured at $300 billion and a year later it is measured at $315 billion, then the rate of growth in that year is?

18. A good for which an increase in income leads to a decrease in demand is a:

19. What does purchasing power parity do?

20. True or False: It's impossible to have falling inflation and falling unemployment at the same time.

21. True or False: Full employment is zero unemployment.

22. What would be an example of Foreign Direct Investment (FDI)?

23. What is not a major goal of macroeconomics?

24. Keynesian theory is related to:

25. What is pegging?

26. What is the slope of the consumption function called?

27. The final value of goods and services produced in a year within the geographical boundaries of a country is known as

28. What relationship does the Phillips Curve specifically address?

29. The use of government spending and taxation to influence the economy is the definition of which of the following terms:

30. What does "ceteris paribus" mean?

31. A printer and a printer cartridge is an example of a:

32. Economists use this term to denote an ongoing rise in the general level of prices quoted in units of money.

33. As a recession begins, unemployment

34. What is recession?

35. Macroeconomics can be defined as:

36. What is an inferior good?

37. True or False: The official measure of GDP understates the true level of national income because of the existance of the "shadow" or informal economy.

38. When is the economy in macroeconomic equilibrium?

39. Which of these is a liability?

40. Which country best approximates a closed economy?

41. What is the central bank of the United States?

42. What is Macroeconomics?

43. When does a shortage occur?

44. What is the interest rate stated on a loan that does not account for inflation or compounding?

45. Periods of very high inflation rates

46. Can the unemployment rate go below the natural rate of unemployment?

47. Which of the following choices relates to the decision made by congress and the president to lower taxes or increase government purchases?

48. According to Keynes, if government earns £1 as tax revenue and spends it as public expenditure what will be the net effect on national income?

49. What is "crowding out"?

50. GDP stands for

51. The aggregate demand and aggregate supply model explains the relationship of

52. Which is not a reason why the aggregate demand curve is downward sloping?

53. If we look at the behavior of the U.S. CPI over the last four decades we realize that inflation

54. Income elasticity of demand of a good is less than 1 if it is a:

55. If price level increases the LM curve will shift to

56. Which scenario is related to an unplanned decrease in inventories?

57. The term “aggregate-supply curve,” describes which of the following?

58. Which is not part of the M1 definition of the Money Supply?

59. In the long run Philips' curve becomes

60. In the very short run

61. Which of the following is NOT a characteristic of Monopolistic Competition?

62. A complement good has what kind of elasticity?

63. Which of the following refers to the situation that occurs when a currency is "pegged"?

64. As the interest rate rises, businesses invest __________ and the ad curve shifts to the __________.

65. Economists agree that ________________ inflation reduces real output.

66. The unemployment rate that is consistent with full employment is known as __________________.

67. ________ are financial securities that represent promises to repay a fixed amount of funds.

68. A tax cut ________ aggregate demand and ________.

69. An expansionary fiscal policy either _____ government spending or _____ taxes.

70. An increase in taxes on labor income shifts the labor supply curve ________ and the ________.

71. An increase in wealth leads to ________ loanable funds.

72. Demand for a given good is inelastic, so it follows that if price rises, __________ will rise, too.

73. Demand is said to be ____ when the quantity demanded changes the same proportion as the price.

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

75. Everything else held constant, a decrease in net exports ________ aggregate ________.

76. Everything else held constant, an autonomous monetary policy easing ________ aggregate ________.

77. Inflation that is ________ than what is expected benefits ________ and hurts ________.

78. A change in the price level produces a ________ the aggregate demand curve.

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

80. According to the classical dichotomy, when the money supply decreases, _____ will decrease.

81. As income taxes rise, disposable income __________, causing __________ the ad curve.

82. The crowding out effect refers to the ________ from ________ in the government's budget deficit.

83. The money multiplier for the united states is __________.

84. A government budget surplus _______ loanable funds.

85. In the factor market, firms ________ and households ________.

86. The change in inventories, a component of aggregate supply, comprises roughly __________ of gdp.

87. A recessionary gap occurs when ________ so that real gdp is ________ potential gdp.

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

89. ________ is the human resource that organizes labor, land, and capital.

90. An inferior good is one for which a(n) _____ in buyers' income causes a(n) _____.

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

92. Consumption spending refers to ________ spending on goods and services.

93. Content convergence describes convergence in the design, production, and ________ of content.

94. Potential gdp ______ and potential gdp per hour of labor ______.

95. Potential gdp in the u.s. will be unaffected by ____________________.

96. Unexpectedly high inflation ______ borrowers and ______ lenders.

97. When ________ in a market, the total net benefit to society is maximized.

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

99. When tax revenue ________ outlays is negative, then the government has a budget ________.

100. In a perfectly competitive market, sellers _________ and buyers _________.

101. In the united states today, nearly _________ of the population has attained a college degree.

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

103. The value of the consumer price index (cpi) is always equal to ______________ in the base year.

104. The value of used goods ________ counted as part of gdp ________.

105. When the demand of a product increases ______

106. The circular-flow diagram shows that ________ should equal ________.

107. The cpi basket consists of items that ______ buy and it is updated frequently to ______.

108. The unplanned change in inventories is ________ and real gdp will ________.

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

110. Which would most likely shift the aggregate supply curve? a change in the prices of _____.

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

112. Over the business cycle, investment spending ______ consumption spending.

113. A place where people exchange goods and services is called a _____.

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

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

116. A downward-moving gdp indicates that ________.

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

118. A stagflation can turn into a cost-push inflation process when _______.

119. In the _____, firms change the underlying technology while holding cumulative output constant.

120. ________ exposure deals with cash flows that result from existing contractual obligations.

121. By about 2050, the ___________ populations in _____________ are expected to boom.

122. In order to take out the effect of _____________, an adjustment must be made for price changes.

123. In texas, people who fall within the top 1 percent of average income pay ____ percent in taxes.

124. The difference between the ________ for a good and the ________ is called consumer surplus.

125. Increases in t will reduce the economys gdp by causing a(n) ________ in the ad.

126. It can be said that ____ laid the foundation for the industrial revolution.

127. The two broad sources of potential gdp growth are growth of ______ and growth of ______.

128. A shopper at a convenience store is ________ sensitive, but price insensitive.

129. _________ refers to the technology gap that exists between different social and economic classes.

130. An economy grows when it does all of the following except _______.

131. Between 1929 and 1933, government spending _____ and net exports _____.

132. Government salaries paid to soldiers in the military are included in the ________ category of gdp.

133. In 1960 federal spending accounted for about ______ percent of the total economy.

134. The _______, the greater is the amount that a household decides to save.

135. To say that economists use the scientific method means that they are using ___________.

136. U.s. imports are _____ produced in _____ and sold in _____.

137. M2 is _____ in dollar value than m1; it also contains _____ assets.

138. Empiricism is a principle in economics that _________.

139. The amount of capital equipment used up or destroyed is called the ____________.