Economics Quiz

The negative relationship between inflation and unemployment is characterized by ___________ in macroeconomics.

• The Engle curve

• The indifference curve

• Okun's law

• The Phillips curve

GDP is the market value of all the final goods:

• Produced domestically.

• Produced by domestic factors of production.

• Produced by all factors of production.

• All of the above.

Discretionary fiscal policy is

• The use of interest rate changes to affect aggregate demand.

• The use of interest rate changes to affect aggregate supply.

• The use of government spending or tax policy to manage aggregate demand.

• The use of government spending or tax policy to manage aggregate supply.

As disposable income increases, consumption

• And saving both increase

• And saving both decrease

• Decreases and saving increases

• Increases and saving decreases

Verticle intercept of consumption function indicates:

• Average propensity to consume.

• Consumption at zero level of income.

• Both of the above.

• None of the above.

The 45° line on a graph relating consumption and income shows

• All the points where the MPC is constant

• All the points at which saving and income are equal

• All the points at which consumption and income is equal

• The amounts households will plan to say that each possible level of income

Difference between Real and Nominal GDP is:

• Measured by excluding some of the sectors

• That real GDP is always smaller than Nominal GDP.

• Change in price level from base year to current year.

• None of the above

When the government makes a payment to an individual for which no good or service is provided in return, this is referred to as a

• Public exchange.

• Private exchange.

• Reverse tax

• Transfer payment.

What does the term 'MPC' stand for in economics?

• Maximum Profit Calculation

• Marginal Propensity to Consume

• Market Price Competition

• Monetary Policy Committee

What is the primary purpose of using fiscal policy?

• To control the money supply

• To regulate interest rates

• To manage government spending and taxation

• To influence exchange rates