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Worksheets

Macro Economics Review

Total questions: 154

Worksheet time: 3hrs 45mins

Name
Class
Date
1.
Importing more than exporting is
a)
trade surplus
b)
trade deficit
c)
balance of trade
d)
balance of payment
2.
An increase in the value of currency is called
a)
appreciation
b)
depreciation
c)
trade surplus
d)
exchange rate
3.
Prices at which currencies are traded is called...
a)
Exchange Currency
b)
Exchange Rate
c)
Foreign Exchange Market
d)
Local Currency Demand
4.
The value of all the final goods and services produced within a nation in a given year.
a)
Gross Domestic Product
b)
per capita GDP
c)
Gross National Product
5.
A product that one country SELLS to another.
a)
import
b)
export
6.

What is GDP per capita?

a)

GDP divided by the value of capital inputs

b)

GDP divided by the population

c)

GDP divided by the number of workers

d)

GDP divided by the number of weeks in the year

7.

Which of the following will NOT increase economic growth?

a)

Updates in technology

b)

Immigration

c)

Increased taxation

d)

Increased Government spending

8.

Which of the following is NOT a consequence of economic growth

a)

Less employment

b)

Pollution

c)

Increased incomes

d)

Improved living standards

9.

Unemployment occurs when

a)

Someone wants a job but can't find work

b)

Someone is able and willing to work but can't find a job

c)

Someone is able to work but does not have employment

d)

Work provided is not sufficient to meet the needs of workers

10.

The rate of unemployment is

a)

How many people are not in work / Total Population x 100

b)

Total Unemployed/Total population x 100

c)

Total unemployed/Workforce x 100

d)

Total unemployed/ (total employed + total unemployed) x 100

11.

During the recession more businesses shut down, causing unemployment. This type of unemployment is:

a)

Seasonal

b)

Frictional

c)

Structural

d)

Cyclical

12.

which of the following is an example of is non durable goods?

a)

milk

b)

bread

c)

both a and b

d)

none of these

13.

the impact of an externality is

a)

positive

b)

negative

c)

either positive or negative

d)

nither positive nor negative

14.

There is only one way of calculating GDP.

a)

True

b)

False

15.

Which is NOT a component of expenditure based GDP?

a)

S = Surplus

b)

C = Consumption

c)

I = Investment of new physical capital

d)

G = Government expenditure

e)

X = Exports

16.
"The Fed" refers to the....
a)
Federal Bureau of Investigation
b)
Federal Government
c)
Federal Reserve System
d)
Federal Income Tax
17.
What is an action of monetary policy?
a)
reduce taxes
b)
changing reserve requirements
c)
increase spending
d)
borrow money for deficit
18.
What happens to the money circulation, when the FED orders a tight money policy?
a)
more money is put out into circulation
b)
less money is put into circulation
c)
circulation stays the same
d)
interest rates rise
19.
The Federal Reserve
a)
is made up of 12 district banks and 25 branch banks.
b)
is managed by a 12-member board of directors.
c)
is made up of district banks that operate independently from one another.
20.
Which part of the Fed decides when to raise or lower interest rates?
a)
Board of Governors
b)
Advisory Committee
c)
Chairman
d)
Federal Open Market Committee
21.
What does Inflation do to the value of money?
a)
Makes it go up.
b)
Makes it go down.
c)
Makes it stay the same.
22.
In a recession, the Fed would likely
a)
Increase the supply of money in the economy
b)
Decrease the supply of the money in the economy
23.

Currency Value of all final goods and services produced within a country's borders.

a)

GDP

b)

Inflation

c)

Aggregate Demand

d)

Imports

24.

Currency value of all final goods and services produced within a country's borders minus the effects of inflation

a)

GDP

b)

Real GDP

c)

Investment

d)

Consumption

25.

A general rise in the price level of an economy

a)

Real GDP

b)

Standard of Living

c)

Inflation

d)

Aggregate Supply

26.

Dollar value of all goods and services purchased by households.

a)

Investment

b)

Consumption

c)

Government Spending

d)

Net Exports

27.

Dollar value of all goods and services purchased by business for the purpose of using in their business.

a)

Aggregate Supply

b)

Exports

c)

Government Spending

d)

Investment

28.

Dollar value of all goods and services purchased by the various agencies of the United States.

a)

Government Spending

b)

GDP Per Capita

c)

Imports

d)

Exports

29.

Dollar value of all goods and services produced in the United States and shipped to other countries MINUS the value of the goods and services imported from other countries.

a)

Standard of Living

b)

Inflation

c)

Net Exports

d)

Consumption

30.

The amount of goods and services ALL buyers in the economy are willing/able to sell at all the possible price price levels.

a)

Aggregate Supply

b)

Aggregate Demand

c)

Consumption

d)

Investment

31.

Currency value of all final goods and services produced within a country's borders divided by the population.

a)

Standard of Living

b)

Real GDP

c)

Exports

d)

GDP Per Capita

32.

Goods and services produced in other countries, then brought to the United States in exchange for currency.

a)

Exports

b)

Imports

c)

GDP

d)

Investment

33.

Goods and services produced in the United States, then sent to other countries in exchange for currency.

a)

Exports

b)

Imports

c)

GDP

d)

Investment

34.

Intangible concept that seeks to represent a country's level of economic prosperity. Correlates with GDP Growth

a)

Standard of Living

b)

GDP Per Capita

c)

Real GDP

d)

GDP

35.

Income per capita is...

a)

GDP / Employed Population

b)

GDP / Total Population

c)

GDP / Number of Cats

d)

GDP / Output

36.

Before you can compare different countries GDP per capita you have to...

a)

google it.

b)

calculate the GDP using the same currency.

c)

calculate the GDP using the same population size.

d)

calculate the per capita income.

37.

Income per worker is:

a)

GDP / Exchange Rate

b)

GDP / PPP

c)

GDP / Number of people in employment

d)

GDP x Number of people in employment

38.

What do taxes collected under the Federal Insurance Contribution Act (FICA) fund?

a)

Social Security and Medicaid

b)

Social Security and Medicare

c)

Medicare and Medicaid

d)

Medicaid and Supplemental Security Income

39.

Who generally bears most of a sales tax when the demand for the good taxed is inelastic?

a)

the retailer

b)

the consumer

c)

the wholesaler

d)

the producer

40.

What do social security taxes pay for?

a)

benefits to federal workers and military personnel

b)

benefits to those who are unemployed

c)

transportation and training expenses for low-income people

d)

benefits to older citizens, surviving family members of wage earners, and people with certain disabilities

41.

Our tax money is spent on all of the following EXCEPT:

a)

Social Security

b)

The Military

c)

Private School Education

d)

National Parks

42.

Fort Bend county charges tax each year on the house that Jennifer owns. Which type of tax does she pay?

a)

Property Tax

b)

Sales Tax

c)

Income Tax

d)

Payroll Tax

43.

Curtis purchased a new pair of jeans for $18. When Curtis pays for his jeans his total is almost $20 because of taxes. Which type of tax does Curtis pay?

a)

Payroll Tax

b)

Income Tax

c)

Sales Tax

d)

Property Tax

44.

Taxes are collected by

a)

Businesses

b)

Parents

c)

Foreign countries

d)

Government

45.
a tax in which the tax rate increases as the taxable amount increases
a)
progressive
b)
regressive
c)
flat
d)
proportional
46.

A _____________tax may at first appear to be a fair way of taxing citizens because everyone, regardless of income level, pays the same dollar amount. By taking a closer look, it is easy to see that such a tax causes lower-income people to pay a larger share of their income than wealthier people pay

a)

progressive

b)

income

c)

flat

d)

regressive

47.
A _________ tax, also referred to as a flat tax, impacts low-, middle- and high-income earners relatively equally. 
a)
regressive
b)
proportional
c)
income
48.
Under a ________ tax system, individuals and entities with low incomes pay a higher amount of that income in taxes compared to high-income earners. 
a)
Regressive
b)
Progressive
c)
Proportional
d)
Flat
49.
Who is in charge of fiscal policy?
a)
Government
b)
Federal Reserve
50.
Which of the following are responsible for making fiscal policy decision? 
a)
The President and Congress
b)
The Federal Reserve System
c)
The National Council of Economic Advisors
d)
The commerce Department
51.
The federal government's overall approach to spending and taxes is called
a)
Physical Policy
b)
Fiscal Policy
c)
Money
d)
Monetary Policy
52.
Taxing & spending to slow the economy is referred to as 
a)
budget surplus 
b)
monetary policy
c)
contractionary policy
d)
budget deficit
53.
An example of expansionary fiscal policy would be
a)
cutting taxes.
b)
cutting government spending.
c)
cutting production of consumer goods.
d)
cutting prices of consumer goods.
54.
If the unemployment rate is rising and GDP is falling, the fiscal policy action that the federal government should MOST likely follow is 
a)
decreasing taxes.
b)
decreasing spending.
c)
decreasing the money supply.
d)
decreasing the reserve requirement.
55.
If and economy experiences a dramatic rise in prices, which fiscal policy action could be taken?
a)
Selling securities on the open market
b)
Raising interest rates
c)
Reducing government spending
d)
Raising reserve requirements
56.
Fiscal Policy is the means by which the government keeps the economy stable through taxes and programs provided to the people.
a)
True
b)
False
57.
The Federal government is concerned that economic growth is too high, that it is unsustainable, and that inflation is resulting. Which of the following fiscal policies  might be enacted to reduce inflation?
a)
Increasing taxation
b)
Open market sales
c)
decreasing taxation
d)
Increasing government spending
58.
An example of expansionary fiscal policy would be
a)
cutting taxes.
b)
cutting government spending.
c)
cutting production of consumer goods.
d)
cutting prices of consumer goods.
59.
Which of the following is not a tool of fiscal policy?
a)
Taxing
b)
Spending
c)
Interest Rates
d)
All of these options are tools of fiscal policy.
60.
When the government raises taxes, what does it take out of circulation?
a)
Money
b)
Credit
c)
People
d)
Jobs
61.
True or False-- the Federal Reserve helps with fiscal policy
a)
True
b)
False
62.

Fiscal Policy is controlled by...

a)

The Government

b)

The Federal Reserve System

c)

The states

d)

The Department of Commerce

63.
Taxing & spending to help the economy grow is referred to as
a)
expansionary policy
b)
monetary policy
c)
contractionary policy
d)
budget deficit
64.
Taxing & spending to slow the economy is referred to as 
a)
budget surplus 
b)
monetary policy
c)
contractionary policy
d)
budget deficit
65.

During a economic expansion, the Federal Government should use...

a)

an expansionary fiscal policy

b)

a contractionary fiscal policy

66.
An example of expansionary fiscal policy would be
a)
cutting taxes.
b)
cutting government spending.
c)
cutting production of consumer goods.
d)
cutting prices of consumer goods.
67.

Which of the following statements is true?

a)

Contractionary monetary policy would increase government revenue & slow down the economy.

b)

Contractionary fiscal policy would decrease the reserve requirement & slow down the economy.

c)

Contractionary fiscal policy would lead to an increase in the national debt.

d)

Contractionary monetary never works

68.
An example of a contractionary fiscal policy would be if:
a)
taxes were cut
b)
the government bailed out GM 
c)
the Fed decrease the fed funds rate
d)
taxes were increased
69.
Money loses its value when it
a)
It becomes too plentiful
b)
becomes too portabale
c)
is divisible
d)
is durable
70.
If the Federal Reserve raises interest rates to combat rapid inflation, what might be a negative outcome?
a)
Unemployment rates would rise
b)
taxes will rise 
c)
The government would put a freeze on prices
d)
international trade would stop 
71.

Fiscal Policy is the

a)

use of taxing and interest rates to influence the economy

b)

use of money supply and interest rates to influence the economy

c)

use of taxing and govt. spending to influence the economy

d)

use of govt. spending and money supply to influence the economy

72.

The annual plan for spending by Congress and the President is

a)

Federal Budget

b)

Fiscal Policy

c)

Money supply

d)

recession

73.

Expansionary Monetary Policy involves increasing the money supply and govt. spending

a)

True

b)

False

74.

Contractionary Fiscal Policy involves

a)

increase the money supply and increase interest rates

b)

increasing govt. spending and decrease taxes

c)

decrease interest rates decrease money supply

d)

decrease govt. spending and increase taxes

75.

Increase in the national debt would be caused by

a)

increasing govt. spending and increase taxes

b)

increasing govt. spending and decrease taxes

c)

decreasing govt. spending and increase taxes

d)

increase interest rates and decrease the money supply

76.

Inflation is caused by

a)

increase in prices in the economy

b)

to little money in the economy

c)

greater demand than supply

d)

greater supply than demand

77.

During a period of recession the best action would be

a)

increase the money supply and lower interest rates

b)

decrease govt. spending and decrease taxes

c)

decrease the money supply and increase govt. spending

d)

increase interest rates and decrease the money supply

78.

Monetary Policy is implemented by

a)

The Federal Budget

b)

The Federal Reserve

c)

Congress and the President

d)

Taxing and govt. spending

79.
"The Fed" refers to the....
a)
Federal Bureau of Investigation
b)
Federal Government
c)
Federal Reserve System
d)
Federal Income Tax
80.
Fee charged to borrow money
a)
Inflation
b)
Interest
c)
Discount rate
d)
Reserve requirement
81.

Monetary policy that increases the money supply

a)

Prime rate

b)

required reserve ratio

c)

easy money policy

d)

open market operations

82.

Interest rate banks charge each other for loans

a)

Prime rate

b)

required reserve ratio

c)

federal funds rate

d)

open market operations

83.

The buying and selling of government securities to alter the supply of money

a)

Prime rate

b)

required reserve ratio

c)

federal funds rate

d)

open market operations

84.

The idea that every one dollar change in fiscal policy creates a greater than one dollar change in the national income

a)

multiplier effect

b)

federal budget

c)

productive capacity

d)

national debt

85.

When the level of federal borrowing makes it more difficult for private businesses to borrow

a)

Crowding-out effect

b)

treasury bill

c)

treasury bond

d)

multiplier effect

86.

A type of short-term bond that must be repaid within a year or less.

a)

Crowding-out effect

b)

treasury bill

c)

treasury bond

d)

multiplier effect

87.

The idea that every one dollar change in fiscal policy creates a greater than one dollar change in the national income

a)

Crowding-out effect

b)

federal budget

c)

treasury bond

d)

multiplier effect

88.

How many Federal Reserve Districts are there?

a)

6

b)

3

c)

12

d)

20

89.

Who is in charge of Monetary Policy

a)

The Government

b)

The Federal Reserve System

c)

The states

d)

The Department of the Treasury

90.
"The Fed" refers to the....
a)
Federal Bureau of Investigation
b)
Federal Government
c)
Federal Reserve System
d)
Federal Income Tax
91.

Which of the following would NOT be included in the GDP?

a)

investment spending by a business

b)

consumer spending

c)

government spending

d)

paper/financial transactions

92.

Which of the following is an example of an intermediate good?

a)

the purchase of leather to make shoes

b)

the purchase of a new radio for your car

c)

the purchase of a new car

d)

the purchase of a new lawnmower

93.

The goal of the government and the American people is that GDP...

a)

remains steady.

b)

grows steadily.

c)

shrinks.

d)

fluctuates.

94.

The single best measure of the overall performance of the American economy and our standard of living is...

a)

GNP.

b)

real GDP.

c)

nominal GDP.

d)

misery index.

95.

Nominal GDP is the current dollar value of the nation's output with no adjustment for inflation.

a)

True

b)

False

96.

CPI stands for which of the following?

a)

Consumer Price Index

b)

Consumer Paid Insurance

c)

Consumer Product Insurance

d)

Consumer Product Index

97.

A construction worker cannot work because of winter snowstorm. He is...

a)

cyclically unemployed.

b)

structurally unemployed.

c)

seasonally unemployed.

d)

frictionally unemployed.

98.

Frictional unemployment means that the worker's skills do not match the jobs available in the economy. Workers must retrain, and learn new skills.

a)

True

b)

False

99.

Cyclical unemployment occurs when jobs gained and lost in connection with the business cycle (during recession/contraction jobs are lost, during expansion jobs are regained).

a)

True

b)

False

100.

"Too many dollars chasing too few goods" describes

a)

the need to print more money.

b)

cost-push inflation.

c)

demand-pull inflation.

d)

deflation.

101.

Stagflation is a combination of inflation and unemployment, and leads to cost-push inflation.

a)

True

b)

False

102.

Stagflation is a combination of inflation and unemployment, and leads to cost-push inflation.

a)

True

b)

False

103.

The immediate effect of inflation is the...

a)

increased value of money.

b)

greater spending by all income groups.

c)

decline in the purchasing power of the dollar.

d)

the ability to buy more stuff.

104.

In the event of inflation, a retired school teacher with a fixed pension would not be hurt.

a)

True

b)

False

105.

Gareth has lost his sales job because of a fall in demand due to rising unemployment. He is considered to be

a)

structurally unemployed.

b)

cyclically unemployed.

106.

Sophia has lost her factory job producing music CDs because people are downloading from the internet rather than buying CDs. She is considered to be

a)

structurally unemployed.

b)

cyclically unemployed.

107.

Inflation means

a)

the economy is rising.

b)

the price of a good has increased.

c)

the general level of prices has increased.

d)

the economy is performing well.

108.

CPI stands for which of the following?

a)

Consumer Price Index

b)

Consumer Paid Insurance

c)

Consumer Product Insurance

d)

Consumer Product Index

109.

The Consumer Price Index (CPI) is used to measure inflation.

a)

True

b)

False

110.

Frictional unemployment means that the worker's skills do not match the jobs available in the economy. Workers must retrain, and learn new skills.

a)

True

b)

False

111.

Cyclical unemployment occurs when jobs gained and lost in connection with the business cycle (during recession/contraction jobs are lost, during expansion jobs are regained).

a)

True

b)

False

112.

Which of these people is officially unemployed

a)

A secretary who took 6 months off for maternity leave

b)

An aspiring actress who waits tables but would rather act

c)

Maid who got fired and will start a new job in 2 weeks

d)

A student who only works 4 hours a week in the library

113.

An unemployment rate of 4% - 6%.

a)

full employment

b)

unemployment rate

c)

labor force

d)

underemployed

114.

This reflects those who are actively seeking employment.

a)

full employment

b)

unemployment rate

c)

labor force

d)

underemployed

115.

You will always have this because people will always want to change jobs.

a)

frictional unemployment

b)

seasonal unemployment

c)

cyclical unemployment

d)

structural unemployment

116.

Santa's helpers in July would represent

a)

frictional unemployment

b)

seasonal unemployment

c)

cyclical unemployment

d)

structural unemployment

117.

As an outdoor lifeguard, you don't have control over your end date, but you expect it and can plan for it.

a)

frictional unemployment

b)

seasonal unemployment

c)

cyclical unemployment

d)

structural unemployment

118.

You have the least amount of control over this since it is based on the ups and downs of the business cycle.

a)

frictional unemployment

b)

seasonal unemployment

c)

cyclical unemployment

d)

structural unemployment

119.

An increase in income tax will cause what change?

a)

Increase in AD

b)

Decrease in AD

c)

Increased AS

d)

Decrease in AS

120.

An increase in business confidence will cause what change?

a)

Increase in AD

b)

Decrease in AD

c)

Increased AS

d)

Decrease in AS

121.

An increase in worker productivity?

a)

Increase in AD

b)

Decrease in AD

c)

Increased AS

d)

Decrease in AS

122.

An increase in oil prices will cause what change?

a)

Increase in AD

b)

Decrease in AD

c)

Increased AS

d)

Decrease in AS

123.

An increase in the min wage causes involuntary unemployment to

a)

Increase

b)

Decrease

c)

Stay the same

124.

Why does an increase in the min wage cause the quantity demanded for labour to fall?

a)

Producers don't require as many workers

b)

Producers are less willing and able to employ as many workers as their costs of production has increases

c)

Less people are willing to work

d)

Less people are able to work

125.

What is the formula of unemployment rate???

a)

=(labor force/unemployed)*100%

b)

=(GDP*labor force)/100%

c)

=(unemployed/labor force)*100%

d)

none of them

126.

Which is not the type of unemployment?

a)

frictional

b)

functional

c)

cyclical

d)

structural

127.

Inflation is most likely to occur during which phase of the business cycle

a)

Expansion

b)

Contraction

128.

Inflation can best be defined as...

a)

A general increase in prices.

b)

An increase in prices of key items purchased by consumers.

c)

The increase in the value of fiat money

d)

The printing of too much paper money.

129.

This type of inflation occurs when an increase in the in production costs are passed on to the consumer.

a)

Supply Inflation

b)

Cost Push Inflation

c)

Imported Inflation

d)

Demand Pull Inflation

130.

This type of inflation occurs when the demand for products is greater that the supply of products.

a)

Cost push inflation

b)

Demand pull inflation

c)

Divisional inflation

d)

Structural inflation

131.
What causes cost push inflation
a)
An increase in demand for goods and services
b)
An increase in supply
c)
A rise in production costs passed on to consumers
d)
A fall in the price of imports
132.
When inflation is high the _______________of the dollar decreases
a)
cost value
b)
purchasing power
c)
importance
d)
validity
133.

Who does Inflation hurt?

a)

People with a fixed income

b)

Savers

c)

Money Lenders at fixed interest rates

d)

All of the above

134.

The phase of a business cycle in which unemployment at the lowest level is a ________________.

a)

expansion

b)

contraction / recession.

135.

_______ occurs when people are in between jobs, entering and reentering the labour force.

a)

Cyclical unemployment

b)

Technological unemployment

c)

Frictional unemployment

d)

Seasonal unemployment

136.

What is povertry itself?

a)

When you don't have money

b)

When your basic needs aren't met

c)

When your begging in th streets

d)

When you don't have a job

137.

What is used to measure inflation?

a)

a ruler

b)

CPI Consumer Price Index

c)

a scale

138.
Which of these is the most liquid asset? 
a)
Checks
b)
Property
c)
Cash
d)
Credit
139.
A good tax should be all of these but?
a)
Simple
b)
Efficient 
c)
Equal
d)
Overbearing 
140.
What is happening here?
a)
Bartering
b)
Cooking
c)
Flirting
d)
Machismo
141.
Which is not a use of money?
a)
Medium of exchange
b)
a store of value
c)
unit of account
d)
to start a fire
142.

What type of money would this be?

a)

Commodity

b)

Fiat

c)

Representitive

d)

Gold

143.
Inflation makes your money less valuable over time?
a)
True
b)
False
144.

The best way for a government to get out of debt is to print more money?

a)

True

b)

False

145.

Which is the least risky investment?

a)

A Stock

b)

A Mutual Fund

c)

Starting your own business

146.
Diversification lowers your risk?
a)
True
b)
False
147.
Progressive taxes
a)
are higher the more you make
b)
are lower the more you make
c)
are the same for everyone
148.

Which would be the best inflation rate?

a)

-4%

b)

3%

c)

15%

149.

This type of card allows you to withdraw money directly out of your checking account to pay for things...

a)

Credit Card

b)

Debit Card

c)

Gift Card

d)

E-Card

150.

The loan a bank gives you to purchase a house is called a...

a)

Mortgage

b)

Default Loan

c)

Equity Loan

d)

Building Loan

151.

The ____________ guarantees your bank deposits up to $250,000?

a)

Chinese Government

b)

FDIC (Federal Deposit Insurance Corporation)

c)

The President

d)

The Bank

152.

Which is not a Characteristic of Money?

a)

Durability

b)

Portability

c)

Divisibility

d)

Invincibility

153.

A financial action taken today that will create financial benefits in the future?

a)

Portfolio

b)

Maturity

c)

Investment

d)

Buying a Ski Doo

154.

A portfolio is the collection of all of one’s financial assets?

a)

True

b)

False

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