#1
Which of the following is not a determinant of macroeconomic equilibrium?
Interest rates
Government spending
Inflation
Exchange rates
#2
What effect does an increase in the money supply have on interest rates, assuming other factors remain constant?
Interest rates increase
Interest rates decrease
No effect on interest rates
Interest rates become volatile
#3
Which of the following is a component of aggregate demand (AD) in macroeconomics?
Interest rates
Disposable income
Net exports
Government budget deficit
#4
What does the term 'aggregate supply' represent in macroeconomics?
Total quantity of goods and services demanded at various price levels
Total quantity of goods and services supplied at various price levels
Total quantity of money in circulation within an economy
Total quantity of goods and services exported by a country
#5
In the aggregate expenditure model, what happens when aggregate expenditure exceeds real GDP?
Inventories decrease
Inventories increase
Inflation decreases
Inflation increases
#6
Which of the following policies could be used to close an inflationary gap?
Decreasing government spending
Increasing taxes
Decreasing interest rates
Increasing government spending
#7
What is the Phillips curve relationship?
Inverse relationship between unemployment and inflation
Direct relationship between unemployment and inflation
Inverse relationship between GDP and inflation
Direct relationship between GDP and inflation
#8
Which of the following is a fiscal policy tool used to combat recession?
Open market operations
Quantitative easing
Decreasing government spending
Increasing interest rates
#9
What is the equation for the expenditure-output (income) model in macroeconomics?
Y = C + I + G + NX
Y = C + S + G + NX
Y = C + I + S + NX
Y = C + I + G - NX
#10
What is the primary function of the central bank in managing the macroeconomy?
Fiscal policy implementation
Regulating stock markets
Conducting monetary policy
Controlling exchange rates
#11
What is the difference between actual GDP and potential GDP called?
Recessionary gap
Inflationary gap
Output gap
Expansionary gap
#12
If the economy is in a recessionary gap, what fiscal policy action would be appropriate?
Decreasing government spending
Decreasing taxes
Increasing government spending
Increasing taxes
#13
According to the loanable funds market model, what happens to interest rates when there is an increase in the demand for loanable funds?
Interest rates increase
Interest rates decrease
Interest rates remain unchanged
Interest rates become volatile
#14
What is the relationship between the current account balance and the capital account balance in the balance of payments?
They are inversely related
They are unrelated
They are positively related
The current account balance affects the capital account balance
#15
What does the term 'crowding out' refer to in macroeconomics?
Increase in government spending leading to a decrease in private investment
Decrease in government spending leading to an increase in private investment
Decrease in interest rates leading to an increase in investment
Increase in interest rates leading to a decrease in investment
#16
In the IS-LM model, what does the LM curve represent?
Equilibrium in the goods market
Equilibrium in the money market
Relationship between interest rates and investment
Relationship between income and consumption