#1
What is meant by macroeconomic equilibrium?
When aggregate demand equals aggregate supply
When inflation rate equals unemployment rate
When government spending equals tax revenue
When fiscal policy equals monetary policy
#2
Which of the following is a tool of expansionary monetary policy?
Decreasing government spending
Decreasing interest rates
Increasing taxes
Increasing reserve requirements
#3
Which of the following is an example of a contractionary fiscal policy measure?
Increasing government spending on infrastructure
Decreasing the reserve requirement for banks
Increasing transfer payments to households
Increasing taxes on consumers
#4
Which of the following is NOT a component of aggregate demand?
Consumption
Investment
Government spending
Exports
#5
What is the primary goal of contractionary monetary policy?
Stimulating economic growth
Controlling inflation
Reducing government deficit
Promoting exports
#6
What is the primary tool of expansionary fiscal policy?
Decreasing government spending
Increasing taxes
Increasing government spending
Decreasing taxes
#7
Which of the following is a goal of monetary policy?
Maximizing government revenue
Minimizing unemployment
Minimizing inflation
Maximizing budget deficit
#8
In the AS-AD model, a decrease in aggregate demand will result in:
Higher output and lower price level
Lower output and higher price level
Higher output and higher price level
Lower output and lower price level
#9
Which of the following is an automatic stabilizer in fiscal policy?
Unemployment benefits
Government subsidies
Infrastructure spending
Tax cuts
#10
What is the formula for calculating the GDP deflator?
Nominal GDP / Real GDP
Real GDP / Nominal GDP
Inflation rate * Real GDP
Nominal GDP - Real GDP
#11
Which of the following is a goal of supply-side economics?
Stabilizing prices
Reducing government intervention
Maximizing government revenue
Minimizing income inequality
#12
What does the term 'stagflation' refer to in macroeconomics?
High inflation coupled with high unemployment
Low inflation coupled with low unemployment
High inflation coupled with low economic growth
Low inflation coupled with high economic growth
#13
What is the formula for the unemployment rate?
(Unemployed / Labor Force) * 100
(Employed / Labor Force) * 100
(Unemployed / Total Population) * 100
(Labor Force / Total Population) * 100
#14
What is the difference between fiscal policy and monetary policy?
Fiscal policy involves changes in government spending and taxation, while monetary policy involves changes in the money supply and interest rates.
Fiscal policy involves changes in the money supply and interest rates, while monetary policy involves changes in government spending and taxation.
Fiscal policy and monetary policy are the same and interchangeable terms.
Fiscal policy involves changes in the exchange rate, while monetary policy involves changes in consumer behavior.
#15
According to the Phillips curve, if policymakers want to decrease unemployment, they should:
Decrease aggregate demand
Decrease taxes
Increase inflation expectations
Increase aggregate supply
#16
What does the Laffer curve depict?
The relationship between inflation and unemployment
The relationship between government spending and GDP growth
The relationship between tax rates and government revenue
The relationship between interest rates and investment
#17
What is the Crowding Out effect in economics?
An increase in government spending leads to a decrease in private investment
An increase in government spending leads to an increase in private investment
A decrease in government spending leads to a decrease in private consumption
A decrease in government spending leads to an increase in private consumption
#18
In the context of monetary policy, what does 'open market operations' refer to?
Government borrowing from central banks
Buying and selling of government securities by central banks
Setting interest rates on loans to commercial banks
Setting reserve requirements for commercial banks
#19
What is the concept of the 'liquidity trap' in economics?
A situation where interest rates are high, discouraging borrowing and spending.
A situation where interest rates are low, leading to hoarding of money instead of spending or investing.
A situation where the money supply exceeds the demand for money, causing inflation.
A situation where government intervention in the economy is minimal, leading to free market equilibrium.
#20
What is the concept of 'crowding in' in the context of fiscal policy?
An increase in government spending leads to an increase in private investment.
An increase in government spending leads to a decrease in private investment.
A decrease in government spending leads to an increase in private investment.
A decrease in government spending leads to a decrease in private investment.