Free Macroeconomics MCQs with Answers
1,499 Macroeconomics MCQs from Economics, each with the correct answer and a written explanation of why it is correct. Free and unlimited, with no account needed.
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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1,499 questions · page 65 of 75
- A. import substitution
- B. export promotion
- C. commercial dumping
- D. multilateral contract
Explanation: Hong Kong and South Korea followed export-promotion strategies, using manufactured exports and international markets to drive industrial…
Correct answer: export promotion- A. balance of trade deficits
- B. price inflation
- C. constrained economic growth
- D. improving terms of trade
Explanation: Higher oil prices increase import bills, worsen trade balances, and raise production and consumer prices, while also restricting growth in…
Correct answer: improving terms of trade- A. international trade per capita
- B. real income per capital
- C. unemployment per capita
- D. calories per capita
Explanation: Real income per capita adjusts national income for population size and inflation, making it a useful broad measure of average living…
Correct answer: real income per capital- A. sell 4 million pounds of tin
- B. sell 8 million pounds of tin
- C. buy 4 million pounds of tin
- D. buy 8 million pounds of tin
Explanation: A 4-million-pound rightward shift in demand would raise the price unless supply also increased by 4 million pounds at the target price.
Correct answer: sell 4 million pounds of tin- A. sell 4 million pounds of tin
- B. sell 8 million pounds of tin
- C. buy 4 million pounds of tin
- D. buy 8 million pounds of tin
Explanation: A 4-million-pound fall in demand would create excess supply and push the price below its target.
Correct answer: buy 4 million pounds of tin- A. is the first of the East Asian countries to be recognized for a successful outward-oriented development strategy
- B. has retained to the present time its strategy of import substitution as a source of economic growth
- C. has always accounted for a significant share of international trade, given its very large population
- D. has significantly increased its openness to international trade and foreign investment in recent decades
Explanation: China moved substantially away from its earlier inward-looking approach by expanding exports, accepting foreign investment and integrating…
Correct answer: has significantly increased its openness to international trade and foreign investment in recent decades1287. The OPEC oil cartel ?
- A. has shown that is easy to achieve cooperation among cartel members
- B. was successful in raising oil prices in the 1970s but was disbanded in the 1980s
- C. has shown greater success in realizing profits during periods of global recession
- D. has had a level of success in raising oil prices that other developing countries are unlikely to achieve with other primary commodities
Explanation: OPEC achieved notable price increases, especially in the 1970s, because oil supply was concentrated among a small group and demand was…
Correct answer: has had a level of success in raising oil prices that other developing countries are unlikely to achieve with other primary commodities- A. labor forces increase
- B. capital stocks increase
- C. new inventions increase productivity
- D. All of the above
Explanation: Growth can result from a larger labour force, increased capital stock, or higher productivity from inventions and improved technology.
Correct answer: All of the above- A. developing country export to advanced countries to receive preferential tariff treatment
- B. developing country imports from advanced countries to receive preferential tariff treatment
- C. any developing country to ignore the most-favored nation clause
- D. any advanced country to ignore the most favored-nation clause
Explanation: The GSP gives eligible developing countries reduced or preferential tariff access for their exports to advanced countries.
Correct answer: developing country export to advanced countries to receive preferential tariff treatment- A. relatively low import tariffs maintained by advanced countries
- B. highly elastic demand for these products in advanced countries
- C. declines in the supplies of these products on world markets
- D. sluggish demand for these products in advanced countries
Explanation: Raw materials and agricultural commodities often face sluggish or slowly growing demand in advanced economies, while productivity can…
Correct answer: sluggish demand for these products in advanced countries1291. Tariff levels in advanced countries tend to be __________ tariff levels in developing countries?
- A. higher than
- B. equal to
- C. lower than
- D. there is no general pattern
Explanation: Advanced countries generally maintain lower average tariff levels than developing countries, although they may use tariff escalation…
Correct answer: lower than- A. primary products such as tin and bauxite
- B. intermediate products
- C. labor-intensive agricultural products
- D. labor-intensive manufacturing products
Explanation: Developing countries have traditionally depended heavily on exports of primary commodities such as minerals, metals and agricultural raw…
Correct answer: primary products such as tin and bauxite1293. Among the institutions and policies that have been created to support developing countries are?
- A. the world Bank
- B. the international Monetary Fund
- C. The Generalized System of Preferences
- D. All of the above
Explanation: The World Bank and IMF provide financial and developmental support, while the Generalized System of Preferences gives eligible developing…
Correct answer: All of the above- A. mixed evidence that does not substantiate the deterioration hypothesis
- B. overwhelming support for the deterioration hypothesis
- C. overwhelming opposition to the deterioration hypothesis
- D. None of the above
Explanation: Empirical research on the long-run terms of trade of developing countries has produced mixed results, so it does not conclusively…
Correct answer: mixed evidence that does not substantiate the deterioration hypothesis- A. Deficit Budget
- B. Reduction in taxation
- C. Increase in public expenditure
- D. Reverse of inflation
Explanation: Deflation is a sustained fall in the general price level, so it is commonly described as the reverse of inflation.
Correct answer: Reverse of inflation- A. Promissory note
- B. Currency note
- C. Exchange rate
- D. Bank cheque
Explanation: A currency note is legal tender issued as money for transactions. A promissory note and cheque are credit instruments, while an exchange…
Correct answer: Currency note1297. From each according to his ability to each according to his need is the theoretical slogan of ?
- A. Feudal System
- B. Capitalist System
- C. Fascist System
- D. Communist System
Explanation: The slogan describes the communist principle of distribution, where people contribute according to their ability and receive according to…
Correct answer: Communist System- A. Gold currency
- B. Hard currency
- C. Silver currency
- D. Soft currency
Explanation: A persistent balance-of-payments deficit increases demand for foreign currency and weakens the domestic currency, making it a soft…
Correct answer: Soft currency- A. Balance of trade
- B. Capital receipts and payments
- C. Savings and investment account
- D. A and B of above
Explanation: The balance of payments records both current transactions, including the balance of trade, and capital or financial receipts and payments.
Correct answer: A and B of above- A. Accepting public deposits
- B. Granting loan and advances
- C. Undertaking agency functions
- D. Banker to the government
Explanation: Accepting deposits, lending and agency services are normal commercial-bank functions, whereas acting as banker to the government is…
Correct answer: Banker to the government