Macroeconomics Principles and Applications Quiz

What is the study of human action in an economic context?

• Macroeconomics

• Biology

• Physics

• Microeconomics

Which of the following is a central coordination problem that any economy must solve?

• Where to produce it

• When to produce it

• How to produce it

• For whom to produce it

What does the law of demand state?

• Quantity demanded rises as price rises

• Quantity demanded falls as price rises

• Quantity demanded falls as price falls

• Quantity demanded rises as price falls

What is the concept in which opposing dynamic forces cancel each other out in the free market?

• Market oligopoly

• Market monopoly

• Market equilibrium

• Market competition

What is the highest amount of output an economy can sustainably produce using existing production processes and resources?

• Gross Domestic Product (GDP)

• Potential output

• Unemployment rate

• Inflation rate

According to John Maynard Keynes, short-run equilibrium output may differ from long-run potential output assuming a fixed price level. True or False?

• True

• Not mentioned

• False

• Cannot say

What are the roles of the government in the economy?

• Only a referee who sets the rules that determine relations between businesses and households

• Only an actor who collects money in taxes and spends that money on projects

• None of the above

• Both an actor and a referee

What are the macroeconomic variables?

• All of the above

• Inflation rate

• Unemployment rate

• Gross Domestic Product (GDP)

What is the equation for Gross Domestic Product (GDP)?

• C x I x G x NX

• C - I - G - NX

• C / I / G / NX

• C + I + G + NX

Which of the following is an economic institution?

• Government

• All of the above

• Goods Market

• Households