#1
What is the primary function of the Federal Reserve System in the United States?
Regulating international trade
Issuing currency
Setting fiscal policy
Conducting monetary policy
#2
Which of the following is NOT a tool of monetary policy?
Open market operations
Discount rate
Government spending
Reserve requirements
#3
Which of the following is NOT a component of GDP?
Government spending
Personal savings
Investment
Consumption
#4
In macroeconomics, what does the term 'inflation' refer to?
Decrease in the general price level
Stability in the overall price level
Increase in the overall price level
Fluctuations in exchange rates
#5
Which of the following is NOT a component of aggregate demand (AD) in macroeconomics?
Consumption
Government spending
Imports
Foreign investment
#6
Which of the following best describes the term 'deflation'?
A sustained decrease in the general price level
A sustained increase in the general price level
Stability in the overall price level
An increase in the overall price level
#7
Which of the following is a characteristic of expansionary fiscal policy?
Increased government spending
Decreased money supply
Higher taxes
Tightening monetary policy
#8
What is the Phillips Curve used to illustrate?
The relationship between inflation and unemployment
The impact of fiscal policy on GDP growth
The effects of exchange rate fluctuations on trade balance
The connection between savings and investment
#9
What is the effect of a trade surplus on a country's currency value?
It causes the currency to appreciate
It causes the currency to depreciate
It has no effect on the currency value
It leads to hyperinflation
#10
What is the primary objective of contractionary monetary policy?
Stimulating economic growth
Reducing inflation
Increasing money supply
Encouraging borrowing and spending
#11
Which of the following is a tool used by central banks to control the money supply?
Tariffs
Exchange rates
Open market operations
Fiscal policy
#12
What is the primary goal of expansionary monetary policy?
To decrease aggregate demand
To increase unemployment
To reduce inflation
To stimulate economic growth
#13
Which of the following is an example of a supply-side policy?
Decreasing income tax rates
Increasing government spending on education
Raising interest rates
Implementing import tariffs
#14
Which of the following is a characteristic of a recessionary gap?
Output exceeds potential GDP
Unemployment is at its lowest level
Aggregate demand exceeds aggregate supply
The economy is operating below full employment
#15
What is the effect of an increase in the labor force participation rate on potential GDP?
It decreases potential GDP
It has no effect on potential GDP
It increases potential GDP
It reduces unemployment rate
#16
Which of the following best describes the concept of 'crowding out'?
Increased government spending leads to decreased private investment
Decreased government spending leads to increased private investment
Increased government spending leads to increased private investment
Decreased government spending leads to decreased private investment
#17
Which of the following is a characteristic of stagflation?
High inflation and low unemployment
High inflation and high unemployment
Low inflation and low unemployment
Low inflation and high unemployment
#18
What effect does an increase in the reserve requirement have on the money supply?
Decreases the money supply
Increases the money supply
No effect on the money supply
Increases the velocity of money