Macroeconomics Overview Quiz

What does a bowed-out production possibilities curve indicate?

• No opportunity cost

• Increasing opportunity cost

• Decreasing opportunity cost

• Constant opportunity cost

In a command economy, who owns the resources?

• Foreign investors

• Individuals

• Corporations

• The government

What is GDP primarily used to measure?

• The total population of a country

• The dollar value of all final goods and services produced

• The inflation rate

• The number of unemployed individuals

Which type of unemployment is considered part of the natural rate?

• Technological

• Frictional

• Cyclical

• Seasonal

What does the Phillips curve illustrate?

• The relationship between supply and demand

• The relationship between interest rates and investment

• The relationship between GDP and inflation

• The relationship between inflation and unemployment

What is the primary goal of expansionary fiscal policy?

• Increase aggregate demand

• Stabilize the currency

• Decrease aggregate demand

• Reduce government spending

What is the effect of an increase in the money supply on interest rates?

• Interest rates remain unchanged

• Interest rates decrease

• Interest rates increase

• Interest rates become volatile

What is the role of the Federal Reserve in the money market?

• To manage government spending

• To regulate international trade

• To control the money supply

• To set tax rates

What happens to net exports when a country's currency appreciates?

• Net exports become negative

• Net exports remain unchanged

• Net exports decrease

• Net exports increase

Which account records the sale and purchase of assets between countries?

• Current account

• Savings account

• Capital account

• Trade account