Free Macroeconomics MCQs with Answers

• A. crisis decisions
• B. administrative foreign policy
• C. legislative decisions
• D. constructive foreign policy

Explanation: Routine foreign-policy decisions made by government departments and bureaucratic agencies are classified as administrative foreign policy.

• A. Realism
• B. Neo-realism
• C. Globalism
• D. Pluralism

Explanation: Globalism examines international relations in a worldwide context and gives particular importance to economic interdependence, trade and…

• A. propaganda
• B. journalism
• C. foreign policy
• D. diplomacy

Explanation: Propaganda is the deliberate spread of ideas or doctrines through persuasion, often to influence public opinion.

• A. foreign policy
• B. diplomacy
• C. power in the context of international relations
• D. international law

Explanation: In international relations, power is the capacity of a nation to use its resources to influence or alter the behaviour of other nations.

• A. 11%
• B. 5%
• C. 8%
• D. 3%

Explanation: Nominal GNP growth includes the effect of higher prices, so price growth is subtracted to estimate real growth: 8% minus 3% equals…

• A. a reference to a government economist favoring high taxes
• B. a special kind of screw driver that reflects the functioning of the economy
• C. a graphic representation of conflict between full employment and inflation
• D. a deflationary curve

Explanation: The Phillips curve represents an inverse relationship between inflation and unemployment, expressing a short-run policy conflict between…

• A. nouveau riches
• B. generation x-ers
• C. baby boomers
• D. symbolic analysts

Explanation: Symbolic analysts are highly skilled professionals such as engineers, lawyers, investment bankers, executives and entertainers who work…

• A. timing
• B. interpretation
• C. implementation
• D. all of the above

Explanation: Policies can be weakened by delays in timing, differing interpretations, and difficulties in implementation.

• A. spending and taxation
• B. wage regulation
• C. income ceilings
• D. bank regulation

Explanation: Fiscal policy changes aggregate demand through government spending and taxation.

• A. monetarism
• B. Reaganism
• C. the gold standard
• D. cash and carry

Explanation: Monetarism explains demand and economic activity by emphasizing the supply and management of money.

• A. that the masses were being exploited
• B. that the market was inherently unstable
• C. the need for the intervention of the owners of the means of production
• D. that industrial workers were becoming the new bourgeoisie

Explanation: The Keynesian revolution challenged the belief that markets automatically maintain full employment, emphasizing that aggregate demand can…

• A. the quantity of capital and labor
• B. the quality of capital and labor
• C. the quality of the labor force
• D. all of the above

Explanation: Growth depends on both the quantity and quality of capital and labour, including skills, education, technology, and productivity.

• A. the GDP
• B. the GNP
• C. the NNP
• D. the SPQR

Explanation: GDP measures production within a country's borders, regardless of whether the productive resources are domestically or foreign owned.

• A. is exclusively used by anthropologists
• B. requires the researcher to disguise his or her identity
• C. involves experimental controls
• D. may compromise the objectivity of the researcher

Explanation: Participant observation places the researcher directly within the group being studied, which can make detached judgment difficult.

• A. feudal agriculture
• B. Christianity
• C. machine-based production
• D. dialectic materialism

Explanation: Modern capitalism is closely linked with machine-based production, which enabled large-scale private production for profit and industrial…

• A. Mexico Panama Costa Rica
• B. United States Canada Puerto Rico
• C. United States Canada Mexico
• D. United States Cuba Mexico

Explanation: NAFTA was the North American trade agreement linking the United States, Canada, and Mexico.

• A. hyperinflation
• B. the Pigou effects
• C. inflation
• D. restraint of trade

Explanation: A general and continuing rise in the overall price level is called inflation, whether it results from demand pressure or rising costs.

• A. savings
• B. withdrawals
• C. unbalanced exchange
• D. exchange flow

Explanation: Withdrawals are income leakages from the circular flow because the money is saved or otherwise not returned to firms through current…

• A. incremental
• B. windfalls
• C. injections
• D. incidentals

Explanation: Injections are funds entering the circular flow from outside household consumption, such as investment, government spending and exports.

• A. demand exceeds supply
• B. supply exceed demand
• C. there is control of purchasing power
• D. consumers have no purchasing power

Explanation: When aggregate demand persistently exceeds available supply, buyers compete for limited goods and the general price level rises.