Learn Trading And Investing - Stocks, Forex And Cryptocurrency

QUIZ NO. 1

Macro Economics MCQ

Multiple Choice— Select the option that best completes the sentence or provides the answer to the question.

A decrease in the money supply is most likely to
raise interest rates, investment, and aggregate expenditures.
raise interest rates and investment, and lower aggregate expenditures.
lower interest rates, investment, and aggregate expenditures.
raise interest rates, lower investment, and lower aggregate expenditures.


When the price level increases it causes households and business firms to try to
increase money balances, which drives interest rates up.
reduce money balances, which drives national income up.
reduce money balances, which drives interest rates up.
increase money balances, which drives interest rates down.


When metal coins, such as gold and silver were used as money, a technique which made them easy to recognize and which did not reduce their value was
sweating.
re-minting.
milling.
debasement.


The main cause of cyclical unemployment is that
some individuals skills do not have marketable skills for the jobs that do exist.
firms engage in race, gender and sex discrimination in their hiring practices.
workers often voluntarily quit a job to look for a better job.
the level of overall economic activity fluctuates.


"Foreign exchange" refers to
the price at which purchases and sales of foreign goods take place.
the actual transaction that occurs as currencies are traded.
foreign currency or various claims on it.
the difference between exports and imports.



Publicly subsidized education and retraining schemes are
aimed at reducing cyclical unemployment.
aimed at reducing structural unemployment.
ways of resisting adjustment to technological change.
used to encourage employment in low-paying jobs.


Which one of the following statements correctly describes the transmission mechanism?
An increase in government spending causes the AE curve to shift upwards, leading to a higher GDP.
An increase in personal consumption leads to an upward shift in the AE curve and thereby increases real GDP.
An decrease in imports causes the AE curve to shift upwards, leading to a higher interest rate.
An increase in the money supply leads to a lower interest rate, higher investment, an upward shift in the AE curve and a higher GDP.


If all the banks in the banking system collectively have $20 million in cash reserves and have a desired reserve ratio of 20 percent, the maximum amount of demand deposits the banking system can support is
$4 million.
$40 million.
$80 million.
$100 million.


One implication of an increase in the cash drain to the public is that the
desired reserve ratio is increased.
desired ratio is reduced.
banking system's ability to create new money following a new deposit is reduced.
amount of new money that can be created from a new source of reserves is increased.


A rise in the price level, given no change in the supply of money, will
increase the demand for money and decrease aggregate expenditure.
decrease the demand for money and decrease aggregate demand.
increase the demand for money and increase aggregate expenditure.
decrease aggregate demand but not affect the demand for money.