Study Quiz For Economics

41 Questions | Total Attempts: 121

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Economics Quizzes & Trivia

Just to study. I have a huge exam coming up. . .


Questions and Answers
  • 1. 
    A rise in the general price level resulting from an excess of total spending (demand)
    • A. 

      Demand-pull inflation

    • B. 

      Cost-push inflation

    • C. 

      Inflation

    • D. 

      Deflation

    • E. 

      Disinflation

  • 2. 
    COLA stands for
    • A. 

      Cost of living advancement

    • B. 

      Cost of living addition

    • C. 

      Cost of living adjustment

    • D. 

      Cost of living augmentation

  • 3. 
    The change in consumption resulting from a given change in real disposable income
    • A. 

      Marginal propensity to cost (MPC)

    • B. 

      Marginal propensity to save (MPS)

    • C. 

      Average marginal propensity to save

    • D. 

      Marginal propensity to spend (MPS)

    • E. 

      Marginal propensity to consume (MPC)

  • 4. 
    The part of disposable income households do not spend for consumer goods and services
    • A. 

      Dissaving

    • B. 

      Spending

    • C. 

      Inflation

    • D. 

      Saving

    • E. 

      Deflation

  • 5. 
    The theory that supply creates its own demand
    • A. 

      Keynesian Law

    • B. 

      Shay's Law

    • C. 

      Say's Law

    • D. 

      Key's Law

    • E. 

      Keynesien Law

  • 6. 
    The actual number of dollars received (nominal income) adjusted for changes in the CPI
    • A. 

      Nominal income

    • B. 

      Real income

    • C. 

      Proportional income

    • D. 

      Recessionary income

    • E. 

      Approximate income

  • 7. 
    The graph or table that shows the amount households spend for goods and services at different levels of disposable income
    • A. 

      Spending function

    • B. 

      Aggregate expenditures function (AE)

    • C. 

      Tax multiplier

    • D. 

      Laffer curve

    • E. 

      Consumption function

  • 8. 
     a fiscal policy that emphasizes government policies that increase aggregate supply in order to achieve long-run growth in real output, full employment, and a lower price level
    • A. 

      Fiscal policy

    • B. 

      Supply-side fiscal policy

    • C. 

      Demand-push fiscal policy

    • D. 

      Recessionary gap

    • E. 

      Inflationary gap

  • 9. 
    It is the ratio of the change in real GDP to an initial change in any component of aggregate expenditures, including consumption, investment, government spending, and net exports.  As a formula, the spending multiplier equals 1/(1-MPC) or 1/MPS.
    • A. 

      Spending multiplier

    • B. 

      Tax multiplier

    • C. 

      Autonomous expenditure

    • D. 

      Investment demand multiplier

    • E. 

      Budget deficit multiplier

  • 10. 
    Inflation means an increase in the price of all goods
    • A. 

      True

    • B. 

      False

  • 11. 
    Inflation is an increase in the general price level of goods and services in the economy
    • A. 

      True

    • B. 

      False

  • 12. 
    The value of the CPI in the base year is always 100 because the numerator and the denominator of the CPI formula are the same in the base year
    • A. 

      True

    • B. 

      False

  • 13. 
    Classical economists believed which of the following
    • A. 

      Recessions will naturally cure themselves

    • B. 

      The government should stay active in the economy, especially in a recession or depression

    • C. 

      The price system will automatically restore full employment

    • D. 

      Demand creates its own supply

    • E. 

      Supply creates its own demand

  • 14. 
    Keynesian theory believes that
    • A. 

      Full employment is not possible

    • B. 

      The price system will automatically restore full employment

    • C. 

      The government should be active and use discretionary fiscal policy to help during a recession or depression

    • D. 

      Supply creates its own demand

    • E. 

      Demand creates its own supply

  • 15. 
    The use of government spending and taxes to influence the nation’s spending, employment, and price level
    • A. 

      Discretionary fiscal policy

    • B. 

      Supply- side fiscal policy

    • C. 

      Fiscal policy

    • D. 

      Non-fiscal policy

    • E. 

      Economic policy

  • 16. 
     the change in aggregate demand (total spending) resulting from an initial change in taxes.  As a formula, tax multiplier equals 1- spending multiplier
    • A. 

      Economic multiplier

    • B. 

      Fiscal multiplier

    • C. 

      Spending multiplier

    • D. 

      Budget multiplier

    • E. 

      Tax multiplier

  • 17. 
    A graph depicting the relationship between tax rates and total tax revenues
    • A. 

      Aggregate expenditures output model

    • B. 

      Laffer curve

    • C. 

      Aggregate expenditures function

    • D. 

      Price index numbers

    • E. 

      Wage-price spiral

  • 18. 
    A reduction in the rate of inflation
    • A. 

      Deflation

    • B. 

      Inflation

    • C. 

      Hyper-inflation

    • D. 

      Disinflation

    • E. 

      Long-term deflation

  • 19. 
    An increase in the general (average) price level of goods and services in the economy
    • A. 

      Disinflation

    • B. 

      Inflation

    • C. 

      Hyper-inflation

    • D. 

      Deflation

    • E. 

      Wage-spiral

  • 20. 
    Consumption function is...
    • A. 

      An index that measures changes in the average prices of consumer goods and services

    • B. 

      The graph or table that shows the amount households spend for goods and services at different levels of disposable income

    • C. 

      The curve that shows the amount businesses spend for investment goods at different possible rates of interest

    • D. 

      The model that determines the equilibrium level of real GDP by the intersection of the aggregate expenditures and aggregate output (and income) curves

    • E. 

      The ratio of the change in real GDP to an initial change in any component of aggregate expenditures, including consumption, investment, government spending, and net exports. As a formula, the spending multiplier equals 1/(1-MPC) or 1/MPS.

  • 21. 
    Federal expenditures and tax revenues that automatically change levels in order to stabilize an economic expansion or contraction; sometimes referred to as nondiscretionary fiscal policy
    • A. 

      Budget surplus

    • B. 

      Spending multiplier

    • C. 

      Automatic stabilizer

    • D. 

      Stabilizer

    • E. 

      Autonomous expenditure

  • 22. 
    Spending that does not vary with the current level of disposable income
    • A. 

      Autonomous expenditure

    • B. 

      Consumption expenditure

    • C. 

      Imports

    • D. 

      Exports

    • E. 

      Price index

  • 23. 
    The curve that shows the amount businesses spend for investment goods at different possible rates of interest
    • A. 

      Wage-price spiral

    • B. 

      Consumer price index (CPI)

    • C. 

      Aggregate expenditures function (AE)

    • D. 

      Aggregate expenditures output model

    • E. 

      Investment demand curve

  • 24. 
    According to the aggregate expenditures model, the economy is said to be in equilibrium..
    • A. 

      At the point where aggregate output and income is greater than aggregate expenditures

    • B. 

      At the point where aggregate expenditures are greater than aggregate output

    • C. 

      At the point where the aggregate expenditures and aggregate output and income curves intersect

    • D. 

      At the point where the economy has full employment of all resources

  • 25. 
    If the CPI this year is 180 and the CPI last was 175, then the annual rate of inflation is
    • A. 

      3.3%

    • B. 

      3.5%

    • C. 

      2.9%

    • D. 

      5.6%

    • E. 

      4.2%