#1
Which of the following is not a component of GDP?
Government spending
Consumer spending
Investment
Imports
#2
What is the formula for calculating GDP?
GDP = C + I + G + (X - M)
GDP = C + I + G - (X - M)
GDP = C + I - G + (X - M)
GDP = C - I + G + (X - M)
#3
What does the term 'GDP per capita' represent?
The total GDP of a country
The GDP divided by the total population of a country
The GDP divided by the number of households in a country
The GDP divided by the labor force of a country
#4
Which of the following is an example of fiscal policy?
Changing the reserve requirement
Buying government securities in the open market
Changing tax rates
Adjusting the federal funds rate
#5
What is the name for the situation where the economy is producing at its maximum potential output?
Equilibrium output
Full employment output
Recessionary output
Underemployment output
#6
Which of the following is a tool of monetary policy?
Social security benefits
Corporate income tax
Open market operations
Public education spending
#7
Which of the following is a tool used by the Federal Reserve to control the money supply?
Fiscal policy
Discount rate
Price ceiling
Monetary policy
#8
What does the term 'inflation' refer to in macroeconomics?
A decrease in the general level of prices
An increase in the general level of prices
Stable prices over time
A decrease in the value of money
#9
What is the formula for the unemployment rate?
(Number of unemployed / Labor force) × 100
(Number of employed / Labor force) × 100
(Number of unemployed / Number of employed) × 100
(Labor force / Number of unemployed) × 100
#10
Which of the following is a characteristic of a recession?
High GDP growth
Low unemployment rates
Contraction in economic activity
Stable price levels
#11
What is the difference between nominal GDP and real GDP?
Nominal GDP is adjusted for inflation, while real GDP is not.
Real GDP is adjusted for inflation, while nominal GDP is not.
Nominal GDP includes only domestic production, while real GDP includes foreign production.
Real GDP includes only domestic production, while nominal GDP includes foreign production.
#12
Which of the following is an example of an automatic stabilizer?
Discretionary fiscal policy
Unemployment insurance
Increasing government spending during a recession
Decreasing tax rates during an economic expansion
#13
Which of the following best describes the Phillips curve?
Shows the relationship between inflation and unemployment
Shows the relationship between interest rates and inflation
Shows the relationship between GDP and inflation
Shows the relationship between government spending and GDP
#14
What is the function of the Federal Open Market Committee (FOMC)?
Regulate banks' reserve requirements
Control the federal funds rate
Set fiscal policy
Set monetary policy
#15
What is the significance of the Keynesian multiplier?
It shows the impact of changes in the money supply on economic output.
It demonstrates the effect of changes in government spending on aggregate demand.
It illustrates the relationship between inflation and unemployment.
It measures the responsiveness of consumer spending to changes in disposable income.
#16
What does the term 'crowding out' refer to in macroeconomics?
Increased government spending leads to lower interest rates
Decreased government spending leads to higher interest rates
Increased government borrowing reduces funds available for private investment
Decreased government borrowing increases funds available for private investment
#17
What is the main determinant of the price elasticity of demand?
The number of substitute goods available
The percentage of income spent on the good
The time horizon considered
The level of advertising for the good