Macroeconomics Review

Macroeconomics

Test Review​

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Multiple Choice

If the Federal reserve and Government are attempting to encourage growth and stimulate the economy, which actions would each take? 
(monetary / fiscal)

• increase the Required reserve / increase government spending
• sell government securities / decrease taxes
• decrease the interest rate / increase government spending
• buy government securities / decrease government spending

Multiple Choice

Which of the following is a monetary policy action used to combat a recession?

• cutting taxes
• increasing the money supply
• decreasing the money supply
• raising taxes

Multiple Choice

If real gross domestic product is declining, the economy is most likely experiencing which of the following?

• increasing unemployment

• negative long-run economic growth

• inflationary pressures

• an increase in aggregate demand

• a recovery

Multiple Choice

What is inflation?

• rise in all prices
• rise in most prices
• rise in some prices
• rise in general prices

Multiple Choice

Taxing & spending to help the economy grow is referred to as

• expansionary policy
• monetary policy
• contractionary policy
• budget deficit

Multiple Choice

Taxing & spending to slow the economy is referred to as 

• budget surplus 
• monetary policy
• contractionary policy
• budget deficit

Multiple Choice

A monopoly is when:

• One seller/business dominates an industry.

• A few sellers/businesses dominate an industry.

• Supply exceeds demand.

• A business offers special gifts and coupons.

Multiple Select

Check all that apply: Which of the following are characteristics of a perfectly competitive market?

• Many buyers/sellers

• Identical Products

• Price Makers

• Low barriers of entry

Multiple Choice

NAFTA is an agreement between all of the following countries EXCEPT

• United States
• Mexico
• Great Britain
• Canada

Multiple Choice

What type of jobs were affected by NAFTA in the US, and were lost in massive numbers?

• Manufacturing 
• Service 
• Tech
• Jobs that required a college degree

Multiple Choice

What does NAFTA stand for?

• North American Federation Trading Act

• North America Fur Trade Agreement

• North America Free Trade Agreement

• Northern Africa Free Trade Act

Multiple Choice

The US can produce 200 airplanes or 400 trucks. Japan can produce 300 trucks or 100 airplanes. 
Which country has the absolute advantage in producing airplanes? 

• Japan
• US

Multiple Choice

In 2010, Mexico placed a limit on the amount of potatoes it will import.

• Tariff

• Quota

• Embargo

Multiple Choice

The United States prohibited all imports and exports to and from Cuba in the 1960s.

• Tariff

• Quota

• Embargo

Multiple Choice

China placed a 25% tax on imported American chicken.

• Tariff

• Quota

• Embargo

Multiple Choice

Which of the following is an expansion, or recovery?

• A

• B

• C

• D

Multiple Choice

If a news headline says, "Finally!!! 2 straight months of increased jobs."

Where on the business cycle is the current economy?

• Peak

• Contraction/Recession

• Trough

• Expansion/Growth/Recovery

Multiple Choice

If a news headline says, "3 months of consecutive job losses is impacting consumer confidence."

Where on the business cycle is the current economy?

• Peak

• Contraction/Recession

• Trough

• Expansion/Growth/Recovery

Multiple Choice

How are monetary policy and fiscal policy similar?

• They are both done by the President.

• They are both done by the Fed.

• They are both used to keep the economy stable.

• They both use four tools.

Multiple Choice

Which fiscal policy tool would be used if the economy were in a trough?

• decrease reserve requirement

• increase individual tax rate

• sell bonds through open market operations

• increase government spending

Multiple Choice

Which of the following is responsible for fiscal policy?

• the Federal Bureau of Investigation

• the Federal Reserve

• Congress & the President

• the Federal Reserve banks

Multiple Choice

Inflation makes your money less valuable over time?

• True
• False

Multiple Choice

What is happening here?

• Bartering
• Cooking
• Flirting
• Machismo

Multiple Choice

What is used to measure inflation?

• a ruler

• CPI Consumer Price Index

• a scale

Multiple Choice

When GDP rises faster than the long-run trend the economy is experiencing-

• recession

• expansion

• recovery

Multiple Choice

GDP declines during a(an)

• peak

• contraction

• expansion

Multiple Choice

The Business Cycle measures ___ over time.

• wealth

• inflation

• economic growth

Multiple Choice

The coins and paper bills used as money in a society

• Prices

• Currency

• Bond

• Checks

Multiple Choice

The kind of bank that provides services for customers and businesses and that is used by most ordinary people

• Investment bank

• Merchant bank

• Commercial bank

• Central bank