Macroeconomics

If the central bank of a country decides to reduce the short-term interest rates, this likely means that…

• The central bank is worried about inflation and wants to stop it.

• The central bank is worried about the value of the domestic currency and wants to boost it.

• The central bank is worried about an imminent recession and wants to boost output.

• The economy is booming and the central bank is trying to cool it down.

Which of the following is the component of the gross domestic product (GDP) is...

• Business expenditures

• Exports to other countries

• Government expenditures

• Consumption expenditures

• All

What is the fundamental problem of economics as a discipline?

• The allocation of resources among competing wants because there are unlimited wants limited resources

• How to ensure continuous economic growth in the face of uncertainty

• How to maximise profits for companies and consumer value for citizens

• How to balance the needs of the economy with society and the environment

What characterizes a command economy (select all that apply)

• Government makes the decisions

• Markets relied-upon to perform allocations

• Reallocation of resources according to need

• All

What problems are we most likely to see at which stage of the business cycle?

• High inflation during recessions.

• High unemployment during booms.

• Low inflation during booms.

• High unemployment during recessions

That part of personal income which is actually available to households for consumption and saving is called-----------

• National Disposable Income

• Personal Disposable Income

• Personal Income

• None.

A temporary unemployment which exists during the period of the transfer of labor from one occupation to another is called

• Voluntary Unemployment

• Involuntary Unemployment

• Cyclical Unemployment

• Frictional Unemployment

Those inflows of money to the government account against which no liability of repayment is created, is called

• Revenue receipts

• Capital receipts

• Revenue expenditure

• Capital expenditure.

Which of the following fiscal policy will be used in Recession phase?

• Expansionary fiscal policy

• Contractionary fiscal policy

What happens when you increase the supply of money in a country?

• Decreases interest rates, increases consumption and investment, and increases aggregate demand

• Increases interest rates, decreases consumption and investment, and decreases aggregate demand