Free Macroeconomics MCQs with Answers

• A. Japan
• B. South Korea
• C. Taiwan
• D. Malaysia

Explanation: Japan is generally regarded as Asia’s most industrialized country because of its advanced manufacturing base, technology and highly…

• A. commercial bank deposits
• B. government bank deposits
• C. government spending
• D. interest rates
• E. None of these

Explanation: Raising interest rates makes borrowing more expensive, which discourages consumers from taking loans and reduces consumption financed by…

• A. increasing bank lending
• B. increasing import duties
• C. reducing government expenditure
• D. None of these

Explanation: Reducing government expenditure lowers aggregate demand, helping to ease demand-pull inflation.

• A. Debtors
• B. Creditors
• C. Business class
• D. None of these

Explanation: Creditors suffer during inflation because the money they receive in repayment has lower purchasing power than the money they lent.

• A. Converting rupee into gold
• B. Lowering of the value of one currency in comparison of some foreign currency
• C. Making rupee dearer in comparison to some foreign currency
• D. None of these

Explanation: Devaluation is an official reduction in the value of a currency under a fixed or managed exchange-rate system, relative to foreign…

• A. Stagnation
• B. Take-off stage in economy
• C. Stagflation
• D. None of these

Explanation: Stagflation combines stagnant or weak economic growth with high inflation, often accompanied by unemployment.

• A. The balance of visible trade
• B. The balance of invisible trade
• C. The balance on the current account
• D. The balance of payments

Explanation: The balance of payments is an accounting statement, so total credits must equal total debits after including reserve changes and errors…

• A. Hyperinflation
• B. Reflection
• C. Stagflation
• D. Galloping

Explanation: Stagflation combines stagnation, especially high unemployment or weak growth, with inflation.

• A. National income
• B. Domestic income
• C. Protection Income
• D. Per capita Income

Explanation: Per capita income is calculated by dividing national income by the country’s population, giving average income per person for a period.

• A. Local currency
• B. Cold currency
• C. Lime currency
• D. Soft currency

Explanation: A soft currency is expected to lose value against other currencies and is often subject to weak demand or economic instability.

• A. Value of all economic activity with in a nation's border
• B. Economics output of a country
• C. Economic activities of federal government
• D. None of these

Explanation: GDP measures the monetary value of final goods and services produced within a country's borders during a specified period.

• A. Decreasing business activity
• B. Falling prices
• C. Unemployment
• D. All of these

Explanation: A depression involves a prolonged and severe contraction in economic activity, commonly accompanied by falling prices and widespread…

• A. Nikki Index
• B. NASDAQ
• C. Dow Jones Index
• D. Major Index

Explanation: The Dow Jones Industrial Average tracks the share-price performance of 30 major US companies, traditionally associated with industrial…

• A. deflation
• B. inflation
• C. cost effective
• D. cost

Explanation: Deflation is a sustained fall in the general price level and is often associated with reduced money circulation or money supply.

• A. Gold
• B. Silver
• C. Wheat
• D. Sugar

Explanation: In the conventional trade-GK classification used by this question, Indonesia is associated with sugar exports.

• A. Jute
• B. Diamond
• C. Tin
• D. Rubber

Explanation: Malaysia has historically been identified as a leading exporter of natural rubber, although Thailand is a major current competitor.

• A. Bangladesh
• B. India
• C. Both of them
• D. None of them

Explanation: Bangladesh is a major exporter of raw jute, while India is a major exporter of jute goods and also trades in raw jute.

• A. Special Drawing Right (SDR)
• B. IMF Drawing Rights (SDR)
• C. International Drawing Right (IDR)
• D. Sure, Drawing Rights (SDR)

Explanation: Special Drawing Rights are IMF-created international reserve assets whose value is based on a basket of major currencies.

• A. New York Interbank Offered Rates (NIBOR)
• B. international Interbank Offered Rates (IOBOR)
• C. London Interbank Offered Rate (LIBOR)
• D. USA Interbank Offered Rate (UIBOR)

Explanation: LIBOR historically represented the London Interbank Offered Rate, the rate at which major banks indicated they could lend to one another.

• A. A free market is necessary for economic growth and stability
• B. Regulation is necessary for economic growth and stability
• C. Active government intervention is necessary to ensure economic growth and stability
• D. Government intervention is not necessary to ensure economic growth and stability

Explanation: Keynesian economics holds that private demand may be insufficient for stable growth and employment, so government can use fiscal and…