Top 80+ Solved Macro Economics 2 MCQ Questions Answer
Q. Stagflation means:
a. inflation with stagnation
b. recession with stagnation
c. inflation galloping like stage
d. inflation & increasing output
Q. Which is the most effective quantitative method to control inflation in the economy?
a. bank rate policy
b. selective credit control
c. cash reserve ratio
d. both (a) and (b)
Q. Which measures are followed by the government for handling inflation?
a. monetary measures
b. fiscal measures
c. controlling investments
d. all of these
Q. Inflation is measured on the basis of:
a. wholesale price index
b. consumer price index
c. marshall’s index
d. all of these
Q. When price increases due to increase in factor prices it is .
a. demand pull inflation
b. cost pull inflation
c. stagflation
d. none of the above.
Q. According to the Phillips curve unemployment will return to the natural rate when ?
a. nominal wages are equal to expected wages
b. real wages are back at equilibrium level
c. nominal wages are growing faster than inflation
d. inflation is higher than the growth of nominal wages
Q. Demand pull inflation may be caused by ?
a. an increase in costs
b. a reduction in interest rate
c. a reduction in government spending
d. an outward shift in aggregate supply
Q. The economist who proposed that, “Inflation is always and everywhere a monetary phenomenon” was
a. john maynard keynes.
b. john r. hicks.
c. milton friedman.
d. franco modigliani.
Q. Inflation occurs whenever
a. the price level rises.
b. the money supply increases.
c. the price level rises continuously over a period of time.
d. the price level falls continuously over a period of time.
Q. An unrealistically low unemployment target will most likely result in
a. inflation.
b. an unemployment rate falling below the natural rate.
c. excessive monetary growth.
d. all of the above.
Q. Governments may pursue inflationary monetary policies
a. to promote high employment.
b. to accommodate demands of workers for higher wages.
c. to finance a persistent budget deficit.
d. for all the above reasons.
Q. Which of the following is least likely to lead to inflationary monetary policy?
a. rising unemployment
b. expanding federal budget deficits
c. declining oil prices
d. conflict in the middle east
Q. Economists from which of the following schools of thought are most likely to favor activistgovernment policies?
a. keynesian
b. monetarist
c. classical
d. all of the above
Q. According to the monetarists, inflation is caused by
a. supply shocks.
b. expansionary fiscal policies.
c. expansionary monetary policies.
d. rising prices.