Macroeconomics MCQ Questions Answers

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

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

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

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

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

6. When the demand of a product increases ______

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

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

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

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

11. 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 ________.

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

13. Nominal gdp differs from real gdp because _____.

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

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

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

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

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

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

20. Domestic product is _______. national product is _______.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

40. Physical capital is _______. financial capital is _______.

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

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

43. A downward-moving gdp indicates that ________.

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

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

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

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

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

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

50. As interest rates rise, _____.

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

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

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

54. Compared to personal computers, cell phones _____.

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

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

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

58. In the circular flow model, governments _______.

59. The aggregate demand curve shows the _____.

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

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

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

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

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

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

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

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

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

69. The demand curve for federal funds is _____.

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

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

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

73. Both ________ and ________ are federal reserve assets

74. Unexpectedly high inflation ______ borrowers and ______ lenders.

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

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

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

78. When the price level decreases, _____.

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

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

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

82. Tax cuts on business income ________ aggregate demand.

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

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

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

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

87. A tax cut ________ aggregate demand and ________.

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

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

90. A nation’s nominal gross domestic product (gdp) _____.

91. A higher required reserve ratio _________ the value of the simple deposit multiplier.

92. A decrease in government purchases shifts the ________ curve to the ________.

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

94. A change in _____ would cause a shift in the short-run aggregate supply curve.

95. A ______ increase in autonomous expenditure increases equilibrium expenditure by $60 billion.

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

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

98. When the federal reserve _____ the money supply, it also _____ interest rates.

99. The supply-side effects of an income tax cut ________ potential gdp and ________ aggregate supply.

100. Gdp measured using base year prices is called _____.