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.
Last updated
1,499 questions · page 69 of 75
- A. Any currency backed by gold or silver bullion rather than credit
- B. Stable currency value of which does not fluctuate greatly
- C. Both of them
- D. None of them
Explanation: Hard currency generally refers to a stable, widely accepted currency whose value does not fluctuate greatly and which is readily…
Correct answer: Both of them- A. Transaction of International monetary business
- B. Negotiable bills drawn in one country to be paid in another country
- C. Both of them
- D. None of them
Explanation: Foreign exchange covers international monetary transactions and the instruments used to settle them, including bills drawn in one country…
Correct answer: Both of them- A. Military system
- B. Land based system
- C. Feudal system
- D. Rural system
Explanation: Feudalism was a medieval system in which nobles granted land to vassals or servants in return for loyalty and services, commonly military…
Correct answer: Feudal system- 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 prominent US companies, historically focused on industrial…
Correct answer: Dow Jones Index- A. Devolution
- B. Devaluation
- C. Price cap
- D. Cut-rate
Explanation: Devaluation is an official reduction in a currency’s value under a fixed or managed exchange-rate system.
Correct answer: Devaluation- A. Demand push
- B. Demand pulls
- C. Cost pull
- D. Demand supply
Explanation: Demand-pull inflation occurs when aggregate demand rises faster than the available supply of goods and services, pushing prices upward.
Correct answer: Demand pulls- A. Debt Payment
- B. Service Charges
- C. Debt Charges
- D. Debt service
Explanation: Debt service includes both the interest due and the repayment of principal on a country’s debt.
Correct answer: Debt service- A. Decreased production costs drive prices up
- B. Decreased production costs drive prices down
- C. increased production costs drive prices down
- D. increased production costs drive prices up
Explanation: Cost-push inflation begins when wages, raw materials, energy, or other production costs increase, causing firms to raise prices.
Correct answer: increased production costs drive prices up- A. Free adjustment
- B. Cost effective adjustment
- C. Comparative adjustment
- D. Cost of living adjustment
Explanation: A cost-of-living adjustment, or COLA, raises wages or benefits to reflect changes in the prices of necessities.
Correct answer: Cost of living adjustment- A. Cost of living
- B. Basic requirement
- C. Cost of life
- D. None of the above
Explanation: Cost of living is the amount of money required to obtain the goods and services needed for a particular standard of living.
Correct answer: Cost of living- A. Capitalism
- B. Socialism
- C. Free market economy
- D. Liberalism
Explanation: Capitalism is based on private ownership of production, profit-driven investment and market exchange.
Correct answer: Capitalism- A. Money flight
- B. Capital drain
- C. Free flow
- D. Capital flight
Explanation: Capital flight means the large-scale transfer of investment funds or wealth from one country to another, often because of political or…
Correct answer: Capital flight- A. All wealth of a nation
- B. Annual Income of the central government
- C. All income of the people on a year
- D. Income derived from taxes by the central government
Explanation: National income is the total income earned by a country's people or factors of production during a year.
Correct answer: All income of the people on a year- A. Monetary policy
- B. Fiscal policy
- C. Commercial policy
- D. Finance policy
Explanation: Commercial policy covers government measures regulating international trade, especially exports and imports, such as tariffs, quotas and…
Correct answer: Commercial policy- A. Business inventory accumulate
- B. Unemployment exists
- C. Price of consumer goods rise
- D. People save more than they intended to save
Explanation: When aggregate supply exceeds aggregate demand, firms cannot sell all current output, so unintended inventories accumulate.
Correct answer: Business inventory accumulate- A. Inflation
- B. Deflation
- C. Social change
- D. Price stability
Explanation: Economic development is broader than economic growth: it combines rising output with social and structural improvements such as better…
Correct answer: Social change- A. Capital
- B. Deposit
- C. Hoarding
- D. Profit
Explanation: Hoarding refers to holding income as idle money rather than spending or investing it.
Correct answer: Hoarding- A. Underemployment
- B. Disguised unemployment
- C. Temporary unemployment
- D. Cyclical unemployment
Explanation: A downturn in the business cycle reduces production and the demand for labour, creating cyclical unemployment.
Correct answer: Cyclical unemployment- A. South Africa
- B. UK
- C. Canada
- D. Australia
Explanation: The branch banking system, in which one bank operates through multiple branches, was first developed in the United Kingdom and later…
Correct answer: UK- A. Buying and selling bills of exchange
- B. Buying and Selling govt. securities
- C. Buying and selling shares of companies
- D. Buying and selling foreign exchanges
Explanation: Open-market operations are the central bank's purchases and sales of government securities in the financial market.
Correct answer: Buying and Selling govt. securities