Free Macroeconomics MCQs with Answers

• A. Okun's law
• B. Phillips curve
• C. Say's law
• D. U-shape curve

Explanation: The Phillips curve shows the short-run inverse relationship between inflation and unemployment: stronger demand may reduce unemployment…

• A. Consumption by households
• B. Investment by firms
• C. Public Spendings
• D. Rate of unemployment

Explanation: GDP is measured through spending on consumption, investment, government spending and net exports.

• A. Supply side economics
• B. Demand side economics
• C. Both (A) & (B)
• D. None of these

Explanation: Classical economics emphasizes flexible prices, market clearing and the productive capacity of the economy, making it associated with…

• A. Equilibrium in goods market
• B. Budget balance
• C. Equilibrium in financial market
• D. None of these

Explanation: The LM curve shows combinations of income and interest rates at which the money or financial market is in equilibrium.

• A. 0 to 1
• B. 1 to 100
• C. -1 to +1
• D. None of these

Explanation: The HDI is a composite index of health, education and living standards, normalized on a scale from 0 to 1.

• A. Negative
• B. Positive
• C. Direct
• D. None of theseTake Economics Courses

Explanation: In Keynesian liquidity-preference theory, a larger money supply lowers the interest rate when other factors remain constant.

• A. Have a large GDP than GNP
• B. Grow slower economically than the other country
• C. Grow faster economically than the other country
• D. Have smaller GDP than GNP

Explanation: Net income payments to foreign investors are factor-income outflows, so domestic production measured by GDP exceeds the income accruing to…

• A. The same as personal income
• B. Income that is used only for consumption
• C. Personal income remaining after income taxes
• D. Exclusive of social security payments or welfareDownload Interactive Maps

Explanation: Disposable income is the amount households can spend or save after personal income taxes are deducted from personal income.

• A. Seasonal
• B. Frictional
• C. Cyclical
• D. Structural

Explanation: Cyclical unemployment rises during economic downturns and falls during recoveries because it follows fluctuations in aggregate business…

• A. Maddison
• B. Kindleberger
• C. Todaro
• D. Friedman

Explanation: Kindleberger distinguished growth from development by describing growth as an increase in output, while development also involves…

• A. Standard of Living
• B. Life Expectancy
• C. Education
• D. All

Explanation: The HDI combines three dimensions: a long and healthy life measured by life expectancy, knowledge measured through education, and a decent…

• A. China
• B. Germany
• C. Japan
• D. United States

Explanation: The United States has traditionally had the world’s largest GNP, now generally reported as gross national income, when measured at market…

• A. Issuance of Debt securities
• B. Issuance of notes and coins
• C. Dollar Reserves
• D. All of above

Explanation: Seigniorage is the revenue obtained by issuing currency because the production cost of notes and coins is far below their face value.

• A. Milton-Friedman
• B. Osborne-Smith
• C. Zelvey
• D. Mickel-Jorden

Explanation: Milton Friedman introduced the helicopter-money thought experiment in 1969 to describe newly created money being distributed directly to…

• A. globalism
• B. pluralism
• C. scientific democracy
• D. neorealism

Explanation: Globalism, pluralism and neorealism are recognized perspectives or approaches in international-relations theory.

• A. multipolar system
• B. bipolar system
• C. assured destruction system
• D. unipolar systemTry Science Kits

Explanation: A multipolar system has several major powers, often forming changing alliances to prevent any one power from dominating.

• A. Physical survival
• B. Territorial integrity
• C. Political independence
• D. Cultural diversity

Explanation: States commonly seek physical survival, territorial integrity and political independence as core security objectives.

• A. unilateral and generic
• B. universal and local
• C. empirical and patriotic
• D. uniform and multiform

Explanation: Before Westphalia, political authority was divided between universal institutions such as the Church and empire and numerous local or…

• A. the global social system closely resembles a social system closely resembles a social system
• B. the global social system differs considerably from a societal social system
• C. a global social system does not exist
• D. there exists consensus on values on a global level

Explanation: A global social system is not identical to an individual society because it contains many societies with different institutions, cultures…

• A. morality will be the foundation of foreign policy
• B. Americans do not always act according to their ideology
• C. the world operates on generous feelings toward others
• D. none of the aboveExplore Policy Courses

Explanation: American foreign policy has often departed from stated ideals when strategic or national interests were involved.