MCQs of Economics – The National Economy

Macroeconomics is the branch of economics that deals with:

The diagram that shows the income received and payments made by each sector of the economy is the:

Macroeconomic theory that emphasised the theories of Keynes and de-emphasised the classical theory developed as the result of the failure of:

The percentage of the labour force that is unemployed is the:

The index used most often to measure inflation is the:

An index of prices of all domestically produced goods in the economy is the:

It has become conventional classify a recession as a period where national output falls for _____ or more.

The length of a business cycle would be measured from:

Indicate below what is NOT a main macroeconomic goal

Aggregate demand includes only:

Total withdrawals from the circular flow of income include:

Total injection are made up of:

Equilibrium in the circular flow of income occurs when:

There are three ways to measure GDP

Real GDP is nominal GDP measured in constant:

The underground economy consists of:

Purchasing power parity exchange rates are used to:

Two of the major factors contributing to growth are:

According to the classical economists, the only gainers from growth would be:

Aggregate supply is the total amount:

The key issues of macroeconomics are

In an economy measuring (1) total value added (2)total spending on final goods and (3)total factor earning gives the result that

In the circular flow of income, saving is an injection and investment is a leakage

In the economy when a steel producer sells steel to car producer it is regarded as:

Leakages from the circular flow are _____, ______ and _____

Injection into the circular flow are ______ ______ and ______

In the circular flow we would expect leakages to ______ injections

Gross national product adjusts GDP for net property income from abroad

Nominal GNP measures income:

Real GNP measures income

Real GNP is a crude measure of national welfare because it excludes

When we refer to the hidden economy we mean unrecorded income owing to:

In a macroeconomic model without foreign trade or a government aggregate demand is the sum of

The sum of the MPS and MPC is 1

A linear consumption function with a positive slope less than one means that if income increases consumption will:

Short-run equilibrium output means that aggregate demand ______ actual output

If desired spending in the economy exceeds income we would expect:

In equilibrium savings exceed investment

When investment is assumed to autonomous the slope of the AD schedule is determined by the:

The multiplier tells us how much ______ changes after a shift in ______

The multiplier is calculated as

If the MPC is 0.5 the multiplier is:

If as a result of households wish to save more there is a change in equilibrium income and no change in equilibrium saving this is an example of:

Aggregate demand without a foreign sector is the sum of:

If the government increases spending and raises taxes by just enough to finance this increase it will:

Starting from a balanced budget, for a given tax rate, an increasing in income will cause the government budget to:

For given government spending and taxation the government budget deficit will grow in _____ and decline in _____

The government budget is good indicator of fiscal stance

Aggregate demand in an economy trading internationally with a government sector can be written as:

The total multiplier for the economy will reflect:

when the level of income _____ there will be a tendency for the trade balance to improve as imports _____

In an Open economy leakages to imports _____ the value of the multiplier

When an open economy is in equilibrium it means that the trade deficit is zero

Higher export demand _____ output and a higher MPZ _____ output