Free Macroeconomics MCQs with Answers

• A. the currency exchange rate
• B. the difference between the value of visible exports and visible imports
• C. The government's policies to increase exports
• D. the rate at which exports are exchanged for imports

Explanation: Terms of trade measure the rate at which a country's exports exchange for imports, usually expressed through export prices relative to…

• A. Government pensioners
• B. Creditors
• C. Savings Bank Account holders
• D. Debtors

Explanation: Inflation reduces the real value of money owed, so debtors repay loans with money that buys less than when it was borrowed.

• A. Money lenders
• B. Central Bank
• C. Private entrepreneurs
• D. Government policy

Explanation: The central bank conducts monetary policy by influencing interest rates, money supply and credit conditions.

• A. Inflation
• B. Hyper-inflation
• C. Deflation
• D. Disinflation

Explanation: Hyperinflation is an exceptionally rapid and uncontrolled rise in prices that severely destroys money's purchasing power.

• A. Fall in production
• B. Increase in prices
• C. Stagflation
• D. None of these

Explanation: Inflation is fundamentally a sustained rise in the general price level, so an increase in prices is its essential feature.

• A. Embargoes
• B. Foreign exchange controls
• C. Quotas
• D. Tariffs

Explanation: A tariff is a tax on imports, and the added cost normally raises their domestic price.

• A. after tax
• B. allowing for change in prices.
• C. Plus, benefits in kind
• D. plus, overtime payments.

Explanation: Real wage measures the purchasing power of a money wage after allowing for changes in the price level.

• A. Certificate issued by a company promising the payment of a specified amount at a fixed rate of interest after a specified period
• B. Certificate for the investment in shares
• C. Certificate for the preference share
• D. None of these

Explanation: A debenture is a company's debt certificate promising repayment of a specified principal, usually with fixed interest, at a stated…

• A. Rise in budget deficit
• B. Rise in money supply
• C. Rise in general price index
• D. Reflection

Explanation: Inflation is identified by a sustained rise in the general price index, not merely by a larger budget deficit or money supply.

• A. Sending of money to someone at distance
• B. The sum of money sent
• C. Both of them
• D. None of them

Explanation: Remittance can mean both the act of sending money and the money sent, commonly by a worker to people in another place or country.

• A. Domestication
• B. Protectionism
• C. Localization
• D. National interest

Explanation: Protectionism is the policy of shielding domestic producers from foreign competition through measures such as tariffs, quotas, or import…

• A. Gross Domestic Product (GOP)
• B. Gross National output (GNO)
• C. Gross National product (GNP)
• D. Gross National Output

Explanation: Gross National Product measures the value of final goods and services produced by a nation’s factors of production during a period…

• A. Open trade
• B. Free trade
• C. Open sky trade
• D. Easy trade

Explanation: Free trade means international trade without artificial barriers such as tariffs, quotas, or foreign-exchange controls.

• A. Embargo
• B. Contraband
• C. Ban
• D. Restriction

Explanation: An embargo is a government order prohibiting or severely restricting trade in specified goods, or trade with a particular country.

• A. Devolution
• B. Devaluation
• C. Price cap
• D. Cut-rate

Explanation: Devaluation is an official reduction in the value of a country's currency against foreign currencies, usually under a fixed or managed…

• A. Malaysia
• B. China
• C. Russia
• D. USA

Explanation: Malaysia has historically been recognized as a major, and in many standard general-knowledge sources the leading, exporter of tin.

• A. Tin
• B. Silver
• C. Aluminum
• D. Gold

Explanation: Mexico is the world’s leading silver producer and a major exporter, making silver the intended mineral.

• A. Mexico
• B. USA
• C. Brazil
• D. Australia

Explanation: Brazil is the world’s leading coffee exporter, especially because of its very large Arabica and Robusta production.

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

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

• A. End benefit
• B. Trickle down
• C. Free market
• D. Capitalism

Explanation: Trickle-down theory claims that supporting businesses and higher-income investors will increase investment and activity, eventually…