
Macro Review #2

Quiz
•
Social Studies
•
12th Grade
•
Hard
Matthew McGehee
Used 4+ times
FREE Resource
60 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following typically occurs during an expansionary phase of a business cycle?
Nominal interest rates decrease.
Income taxes decrease.
The price level decreases.
Government transfer payments increase.
Employment increases.
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Economic growth refers to an increase in which of the following?
Government spending
Consumption spending
Nominal gross domestic product
Potential real gross domestic product
Household wealth
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
If both the nominal interest rate and the expected inflation rate increase, what will happen to the real interest rate?
It will increase because the expected inflation rate has increased.
It will increase because the nominal interest rate has increased.
It will increase if the expected inflation rate increases by more than the nominal interest rate.
It will decrease because the nominal interest rate has increased.
It will decrease if the expected inflation rate increases by more than the nominal interest rate.
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following statements is true about an expansionary fiscal policy?
It decreases demand for loanable funds.
It decreases the equilibrium price level.
It decreases the equilibrium real interest rate.
It increases aggregate demand.
It increases the money supply.
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following will most likely result from deflation?
Increased nominal interest rates
Increased business profits
Increased real value of fixed incomes
Decreased purchasing power of cash
Decreased real wealth
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following is a defining characteristic of a fractional reserve banking system?
The existence of a central bank with a monopoly on money creation
The use of paper money backed by a commodity such as gold or silver
The fact that banks retain an amount of bank reserves that is less than the amount of customer demand deposits
The requirement that banks maintain a certain percentage of their reserves as a deposit in an account at the central bank
The regulations that separate investment banking from commercial banking
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
A negative aggregate supply shock will result in which of the following in the short run?
An increase in the price level and a decrease in the unemployment rate
A decrease in the price level and an increase in the unemployment rate
A decrease in both the price level and real output
An increase in both the price level and real output
An increase in both the price level and the unemployment rate
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