Top 50+ Solved Int. Macro Economics MCQ Questions Answer
Q. In the IS–LM model, the impact of an increase in government purchases in the goods market has ramifications in the money market, because the increase in income causes a(n) in money .
a. increase; supply
b. increase; demand
c. decrease; demand
d. decrease; supply
Q. In the IS–LM model under the usual conditions in a closed economy, an increase in government spending increases the interest rate and crowds out:
a. prices
b. investment
c. the money supply
d. taxes
Q. A decrease in the price level shifts the curve to the right, and the aggregate demand curve .
a. IS; shifts to the right
b. IS; does not shift
c. LM: shifts to the right
d. LM; does not shift
Q. If the short-run IS–LM equilibrium occurs at a level of income below the natural level of output, then in the long run the price level will , shifting the curve to the right and returning output to the natural level.
a. increase; IS
b. decrease; IS
c. increase; LM
d. decrease; LM
Q. When using AD/AS analysis to illustrate changes within an economy, which of the following would NOT need to be considered when looking at changes to economic growth?
a. Increased labour productivity
b. More efficient use of the capital stock
c. Developing a more efficient capital and finance sector
d. Increased availability of social capital
Q. Which of the following is a major influence on AS?
a. The quality of the factors available
b. Consumption
c. Government spending
d. The advice of government
Q. The Phillips curve implied that there was a trade- off available to governments between:
a. The price level and unemployment
b. The price level and employment
c. Out put and employment
d. Inflation and unemploymen t
Q. A belief that expectations were exogenous could lead one to the view that judgements about the future were likely to be based on:
a. The best available information
b. Past experience
c. all of the above
d. none of the above
Q. Which of these is NOT a monetary policy tool?
a. open market operations
b. balanced accounts
c. reserve requirements
d. discount rates
Q. Stagflation results from
a. a shift of the AS curve to the left.
b. a shift of the AS curve to the right.
c. a shift of the AD curve to the left.
d. a shift of the AD curve to the right.
Q. An increase in aggregate demand (given no change in aggregate supply) will cause inflation.
a. constant
b. higher
c. lower
d. none of the above
Q. Which of the following would NOT cause a SHIFT in AS?
a. Incentives
b. The structure of the economy
c. The level of government spending
d. The costs of the factors of production
Q. Which of the following events will shift the Aggregate Supply curve to the left?
a. a fall in interest rates.
b. land costs fall.
c. real wages rise.
d. inflation expectations decrease.
Q. The short-run Aggregate Supply curve is upward sloping only because we assume that resource costs are held .
a. constant
b. flexible
c. need more information
d. none of the above
Q. If Aggregate Demand exceeds Aggregate Supply, unwanted inventories will begin to accumulate, forcing firms to prices to get rid of those inventories.
a. zero
b. none of these
c. increase
d. reduce