MCQ On Macroeconomics: Trivia Test! Quiz
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- 1.As the part of a person's wealth that can be readily used for transactions of buying items.
- A.
Currency
- B.
Money supply
- C.
Medium of exchange
- D.
Checking deposits
- E.
Money
- 2.The level of income or real GDP at which the 45-degree line and the expenditure line cross; also called the equilibrium income.
- A.
Marginal propensity to consume
- B.
Expenditure line
- C.
Spending balance
- 3.Something of value owned by a person or firm.
- A.
Asset
- B.
Productivity
- C.
Liability
- D.
Unit of account
- E.
Open market operation
- 4.As labor grows you'll be able to produce more, but at a lower rate.
- A.
Inflation adjustment line
- B.
Productivity
- C.
Demand shock
- D.
Velocity
- E.
Diminishing returns
- 5.The growth rate of productivity = 1/3 (growth rate of capital per hr of work) + (growth rate of technology) OR Growth rate of technology = growth rate of productivity - 1/3 (growth rate of capital per hour of work)
- A.
Target inflation rate
- B.
Aggregated demand
- C.
Growth accounting formula
- D.
Federal funds rate
- E.
Reserves
- 6.The discovery of new knowledge or a new principle.
- A.
Innovation
- B.
Invention
- C.
Diffusion
- D.
Disinflation
- E.
Re inflation
- 7.The central bank's goal for the average rate of inflation over the long run.
- A.
Federal reserves system
- B.
Quantity equation of money
- C.
Real business cycle theory
- D.
Target inflation rate
- E.
Marginal propensity to consume
- 8.The buying or selling of bonds by the central bank.
- A.
Abc
- B.
Federal open market committee
- C.
Federal reserves system
- D.
Federal funds rate
- E.
Open market operation
- 9.Something of value that a person/firm owes to someone else.
- A.
Assets
- B.
Liability
- C.
Reserves
- 10.Something that will allow purchasing power to be carried from one person to the next
- A.
Productivity
- B.
Unit of account
- C.
Bank
- D.
Store of value
- 11.The equation relating the price level and GDP to the quantity of money and the velocity of money. (Quantity of money) (velocity) = (price level) (real GDP)
- A.
Spending balance
- B.
Quantity equation of money
- C.
Monetary policy rule
- D.
Medium of exchange
- 12.The fraction of a banks deposits that is required to hold at the federal reserves
- A.
Store of value
- B.
Checking deposits
- C.
Required reserve ratio
- D.
Quantity theory of money
- E.
Inflation
- 13.The interest rate on overnight loans between banks.
- A.
Federal funds rate
- B.
Required reserve ratio
- C.
Reserves
- D.
Open market operation
- E.
Consumption function
- 14.Coins & paper money.
- A.
Money
- B.
Store of value
- C.
Assets
- D.
Bank
- E.
Currency
- 15.Output per unit of labor (Y/L)
- A.
Diminishing returns
- B.
Technological change
- C.
Growth accounting formula
- D.
Productivity
- 16.Innovation that creates something brand new
- A.
Invention
- B.
Innovation
- C.
Diffusion
- D.
Disinflation
- E.
Demand shock
- 17."practice makes perfect"
- A.
Money supply
- B.
Open market operation
- C.
Expenditure line
- D.
Learning by doing
- 18.New knowledge is brought into application with a new product
- A.
Invention
- B.
Innovation
- C.
Diffusion
- 19.A line showing a negative relationship between inflation and the aggregated quantity of goods/services
- A.
Expenditure line
- B.
Aggregated demand (AD) curve
- C.
Inflation adjustment (IA) line
- D.
Medium of exchange
- 20.A flat line showing the level of inflation in the economy at a given point in time. It shifts up when real GDP is greater than potential
- A.
Real business cycle theory
- B.
Federal funds rate
- C.
Aggregated demand (AD) curve
- D.
Expenditure line
- E.
Inflation adjustment (IA) line
- 21.A component of the Keynesian Theory, ____ represents the proportion of an aggregate raise in pay that's spent on the consumption of goods/services
- A.
Marginal propensity to consume (MPC)
- B.
Aggregated demand curve (AD)
- C.
Inflation adjustment line (IA)
- D.
Quantity equation of money
- 22.A slowing in the rate of price inflation. ____ is used to describe instances when the inflation rate has reduced marginally over the short term.
- A.
Price shock
- B.
Demand shock
- C.
Disinflation
- D.
Reinflation
- E.
Inflation
- 23.A condition of slow economic growth and relatively high unemployment. Occurs when the economy isn't growing, but prices are
- A.
Disinflation
- B.
Reinflation
- C.
Inflation
- D.
Invention
- E.
Stagflation
- 24.A general decline in prices, often caused by a reduction in the supply of money or credit. Deflation in government, personal or investment spending. Can increase unemployment => can then lead to economic depression.
- A.
Opperation
- B.
Disinflation
- C.
Stagflation
- D.
Deflation
- E.
Innovation
- 25.An item that people are willing to accept as payment for what they are selling because they in turn can use it to pay for something else that they want
- A.
Currency
- B.
Medium of exchange
- C.
Money
- D.
Money supply
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