Macroeconomics Quiz

If people are made unemployed because of a fall in aggregate demand this is known as:

• Cyclical unemployment

• Frictional unemployment

Inflation:

• Always reduces the cost of living

• Reduces the purchasing power of a pound

An increase in costs will

• Shift aggregate demand

• Shift aggregate supply

Which of the following is a major influence on AS?

• Consumption

• The quality of the factors available

• Government spending

What are the components of aggregate demand in macroeconomics?

• The components of aggregate demand are: Consumption, Investment, Government Spending, and Net Exports.

• Exports, Imports, Stock Market

• Wages, Interest Rates, Inflation

• Savings, Trade Balance, Foreign Investment

What is the relationship between inflation and unemployment in macroeconomics?

• There is an inverse relationship between inflation and unemployment, as described by the Phillips Curve.

• There is no relationship between inflation and unemployment.

• Higher unemployment leads to higher inflation rates.

• Inflation and unemployment are directly proportional.

How do fiscal policies impact macroeconomic stability?

• Fiscal policies impact macroeconomic stability by regulating aggregate demand, influencing growth, inflation, and unemployment.

• Fiscal policies are solely responsible for international trade balances.

• Fiscal policies have no impact on inflation rates.

• Fiscal policies only affect government spending.

How do international trade and macroeconomics interact?

• Inflation is solely determined by domestic factors.

• Macroeconomics has no impact on global trade policies.

• International trade and macroeconomics interact through GDP growth, employment levels, inflation, and balance of payments.

• International trade only affects local markets.

If the Fed decreases the money supply, it is implementing a(n) ____________ ________________ policy

• expansionary monetary

• contractionary monetary

• expansionary fiscal

• contractionary fiscal

Which is NOT an effect of Expansionary Fiscal Policy

• Encourage consumer spending and investment

• Increase Real GDP

• Increase Price Level

• Decrease Employment