Deck 17: Introduction to Macroeconomics

Question 1

Macroeconomics involves the study of:

A) Individual markets
B) Individuals' decisions to work
C) The whole economy
D) The determinants of the price of a particular product

Answer 1

C

Question 2

Which of the following is not likely to be studied in macroeconomics?

A) Unemployment
B) A favourable balance of trade
C) The price of cars
D) The growth of an economy

Answer 2

C

Question 3

Which of the following is the best example of fiscal policy?

A) Interest rates
B) Control of the money supply
C) Changes to the law
D) Changes in taxation rates

Answer 3

D

Question 4

Which of the following is the best example of monetary policy?

A) Changes to interest rates
B) A change in income tax
C) A change in government spending
D) A change in the law

Question 5

To increase demand in the economy a government might:

A) Increase income tax
B) Reduce government spending
C) Increase tax on company profits
D) Make it cheaper to borrow

Question 6

An example of government policy conflict might be:

A) More spending to increase growth and reduce unemployment
B) Lower interest rates leading to more employment and more growth
C) Lower taxation leading to more growth and lower unemployment
D) An increase in demand leading to less unemployment and higher prices

Question 7

A policy instrument such as fiscal policy:

A) Is the result of achieving an objective,
B) Is a target,
C) Is a by-product of achieving a target,
D) Is used to achieve an objective,

Question 8

A key issue facing the UK government at the moment is to raise the skills level of younger people.

Question 9

Fiscal policy can affect demand in the economy but not the supply.

Question 10

By controlling the ________ rate the Bank of England can influence the amount of borrowing in the economy.

Question 11

If the government uses taxation and government spending to shift aggregate demand or supply it is called what?

A) Monetary policy
B) Ecumenical policy
C) Fiscal policy
D) Normative policy

Question 12

If the government uses interest rates to shift aggregate demand or supply it is called what?

A) Monetary policy
B) Ecumenical policy
C) Fiscal policy
D) Normative policy

Question 13

Which of the following would be a macroeconomic topic?

A) The price of books
B) The effect of a change in interest rates on savings
C) The wage rate of footballers compared to retail workers
D) The demand for shoes

Question 14

Which of the following would not be an example of a macroeconomic topic?

A) The general price level
B) The average wage rate in the economy
C) The price of holidays
D) The effect of a change in government expenditure on GDP

Question 15

Which of the following is not a government economic objective?

A) Low level of unemployment
B) Volatile prices
C) Favourable balance of trade
D) Economic growth