#1
Which of the following is an example of a leading macroeconomic indicator?
Stock market index
ExplanationStock market index is predictive of future economic trends.
#2
What is the equation for the simple Keynesian consumption function?
C = a + bY
ExplanationConsumption equals autonomous consumption plus the marginal propensity to consume times income.
#3
What is the formula for calculating the unemployment rate?
(Number of unemployed / Labor force) * 100%
ExplanationPercentage of unemployed individuals in the labor force.
#4
Which of the following is NOT a component of the Aggregate Demand curve?
Imports
ExplanationAggregate Demand includes Consumption, Investment, Government spending, but not Imports.
#5
Which of the following is a tool of monetary policy used by central banks?
Quantitative easing
ExplanationCentral banks purchase financial assets to increase money supply.
#6
What is the equation for the investment function in the Keynesian Cross model?
I = a + bY
ExplanationInvestment equals autonomous investment plus the marginal propensity to invest times income.
#7
What does the Phillips Curve illustrate in macroeconomics?
The relationship between inflation and unemployment
ExplanationIt shows the trade-off between inflation and unemployment rates.
#8
In the Solow growth model, what does the steady state represent?
A situation where capital per worker remains constant over time
ExplanationIt indicates equilibrium with no further growth in capital per worker.
#9
What is the equation of the Aggregate Demand curve in the Keynesian Cross diagram?
AD = C + I + G + (X - M)
ExplanationAggregate Demand equals Consumption, Investment, Government spending, and net Exports.
#10
What does the IS-LM model in macroeconomics analyze?
The interaction between the goods market and the money market
ExplanationIt examines equilibrium in goods and money markets.
#11
Which of the following is an assumption of the classical macroeconomic theory?
Prices and wages are flexible
ExplanationAssumes prices and wages adjust quickly to maintain equilibrium.
#12
According to the quantity theory of money, what is the relationship between money supply and price level?
Direct
ExplanationDirect relationship where an increase in money supply leads to inflation.
#13
Which of the following represents the concept of the 'natural rate of unemployment'?
The unemployment rate that exists when the economy is at full employment
ExplanationIt's the unemployment rate at full employment level of output.