Exploring Macroeconomics: A Comprehensive Quiz

Which of the following is a key assumption of the Solow Growth Model?

• Increasing returns to scale

• Constant returns to scale

• Decreasing returns to scale

• No returns to scale

What is the primary tool used by central banks to control inflation?

• Taxation

• Interest rates

• Government spending

• Exchange rates

Which of the following is an example of a contractionary fiscal policy?

• Increasing government spending

• Decreasing taxes

• Reducing government spending

• Increasing subsidies

What type of unemployment is caused by technological advancements?

• Frictional unemployment

• Structural unemployment

• Cyclical unemployment

• Seasonal unemployment

Which of the following is a benefit of international trade?

• Increased tariffs

• Trade deficits

• Access to a larger variety of goods

• Decreased competition

What does the Phillips Curve illustrate?

• The relationship between inflation and unemployment

• The relationship between interest rates and investment

• The relationship between GDP and national debt

• The relationship between exports and imports

Which of the following is a characteristic of hyperinflation?

• Slow and steady increase in prices

• Rapid and uncontrollable increase in prices

• Decrease in the money supply

• Increase in unemployment

What is the primary goal of monetary policy?

• To increase government revenue

• To control inflation and stabilise the currency

• To reduce unemployment

• To increase exports

Which of the following is an example of an automatic stabiliser in fiscal policy?

• Discretionary tax cuts

• Unemployment benefits

• Infrastructure spending

• Military expenditure

What is the term for a sustained decrease in the general price level of goods and services?

• Inflation

• Deflation

• Stagflation

• Reflation