Unit 3: Macroeconomics Test Review

Which of the following would NOT be counted in GDP calculations?

• A new car produced and sold in the country

• A used car sold by a dealership

• A haircut provided by a licensed stylist

• Construction of a new government building

The Federal Reserve's structure includes which of the following components?

• 12 District Banks and a Board of Governors

• 50 State Banks and a Presidential Committee

• 7 Regional Banks and a Congressional Oversight Board

• 15 National Banks and a Treasury Department

How does the Federal Reserve use monetary policy to address an economic slowdown?

• By raising interest rates

• By lowering interest rates

• By increasing bank regulations

• By reducing the money supply

Which of the following is NOT a tool of fiscal policy?

• Government spending

• Taxation

• Interest rates

• Federal budget allocation

What is the primary focus of macroeconomics?

• Individual consumer behavior

• The behavior and performance of an economy as a whole

• Business micromanagement strategies

• International trade agreements

How does the Fed use Open Market Operations to expand the money supply?

• By raising interest rates

• By buying government bonds

• By selling government bonds

• By increasing reserve requirements

Which type of unemployment is most directly associated with a recession?

• Frictional unemployment

• Structural unemployment

• Cyclical unemployment

• Seasonal unemployment

Which of the following best describes the Federal Reserve's approach to managing the economy?

• Maintaining a constant money supply regardless of economic conditions

• Allowing the free market to self-regulate without intervention

• Balancing economic growth and inflation through various policy tools

• Focusing solely on maximizing employment rates

Who is responsible for making fiscal policy decisions?

• The Federal Reserve

• The Supreme Court

• Congress and the President

• State governments

Which of the following best describes inflation?

• A decrease in the overall price level of goods and services

• An increase in the value of a country's currency

• A general increase in prices and fall in the purchasing value of money

• A rapid increase in a country's GDP