Macroeconomics Quiz

Which of the following is not a stage of the business cycle?

• Recession

• Expansion

• Peak

• Deflation

What typically occurs during the trough stage of the business cycle?

• Economic activity is at its highest point.

• Economic activity is at its lowest point.

• Economic growth is rapid.

• Inflation rates increase significantly.

Which of the following is not one of the three main economic goals of a government?

• Achieving low inflation

• Reducing trade deficits

• Maintaining low unemployment

• Promoting steady growth

What does the unemployment rate measure?

• The percentage of people actively seeking work who are unemployed.

• The percentage of the population that is retired.

• The total number of jobs available in an economy.

• The percentage of employed people earning below the poverty line.

If a country's inflation rate is high, what might this indicate?

• Prices are rising faster than wages.

• The country is experiencing a period of economic stagnation.

• The unemployment rate is decreasing rapidly.

• The economy is in a trough phase of the business cycle.

Which of the following economic indicators is most directly used to measure the overall size and health of an economy?

• Inflation rate

• Gross Domestic Product (GDP)

• Stock market performance

• Unemployment rate

What is the primary goal of fiscal policy?

• To regulate the money supply

• To control inflation by altering the interest rate

• To influence economic activity through government spending and taxes

• To enforce trade regulations

How can governments use fiscal policy to stimulate economic growth?

• By decreasing tax rates and increasing government spending

• By increasing tax rates and reducing government spending

• By keeping tax rates and government spending constant

• By imposing higher tariffs on imports

What happens to consumer disposable income when tax rates are reduced?

• It increases

• It decreases

• It remains unchanged

• It depends on inflation

Which of the following best describes lobbying in the context of fiscal policy?

• It is the government's enforcement of tax policies

• It is the act of influencing policymakers to make decisions favoring specific groups

• It is the public's rejection of tax increases

• It is a strategy for reducing budget deficits