# Macro ALL weeks (9-14)

Multiple Choice Questions: Use of National Income + Aggregate Demand and Supply + Unemployment + Money + Exchange Rates

 Question 1: The lower turning point of a business cycle is called a:
 recession trough contraction phase stagflation

 Question 2: GDP (Y) of an economy with housefold, business or government and foreign sectors is equal to:
 Y = C + I + G + M (import) Y = C + I + G + X + M Y = C + S Y = C + I + G + X (net export)

 Question 3: A fall in the price level leads to:
 decrease in real GDP demanded along an unchanged AD curve bodily shift to the right of the AD curve an increase in real GDP demanded along an unchanged AD curve bodily shift to the left of the AD curve

 Question 4: Downward slope of AD curve is due to the operation of:
 all of the above intertemporal substitution effect real money balance effect (wealth effect) international substitution effect

 Question 5: Ceteris paribus, if the reserve bank raises interest rates, this will lead to:
 decrease in real GDP demanded along an unchanged AD curve an increase in real GDP demanded along an unchanged AD curve a rightward shift of the AD curve a leftward shift of the AD curve

 Question 6: Economic theories can only be applied in the following ranges of SAS curve:
 intermediate range horizontal range vertical range all the above

 Question 7: The LAS curve is vertical at that level of RGDP where:
 the SAS curve intersects the AD curve economy is operating at it's physical limit each firm is producing its profit -maximising output the economy achieves full employment

 Question 8: Macroeconomic equilibrium occurs:
 at the point of intersection of the LAS and AD curves at the point of intersection of the LAS and SAS curves none of the above at the point of intersection of the SAS and AD curves

 Question 9: If the equilibrium RGDP is less than it's long run level:
 there is a recessionary gap the economy is not in macroeconomic equilibrium the economy is in an unemployment equilibrium both (A) and (C) are correct

 Question 10: An increase in wage rates will shift:
 the LAS curve to the left but leave SAS curve unchanged both the SAS and LAS curves to the left both the SAS and LAS curves to the right the SAS curve to the left but leave LAS curve unchanged

 Question 11: The natural rate of unemployment for Australia is about:
 0 per cent 5 per cent 4 per cent 6.2 per cent

 Question 12: Unemployment that occurs when workers either change jobs or enter the labour force is called:
 Structural unemployment Structural and cyclical unemployment Frictional unemployment Cycling and seasonal unemployment

 Question 13: Discouraged workers are:
 not included in the labour force classified as unemployed classified as underemployed included in the labour force

 Question 14: Ceteris paribus, which of the following will raise the natural rate of unemployment:
 an increase in the demand for labour a decrease in the supply of labour due to an increase in the average time spent searching for the right job a decrease in the labour force none of the above

 Question 15: When the economy is at full employment:
 the entire working age population is employed the entire labour force is employed frictional and structural unemployment together account for total unemployment cyclical unemployed accounts for total unemployment

 Question 16: When you regularly deposit \$100 a week into your bank account so that you can buy a new car sometime in the future, you are using money as:
 a medium of exchange a unit of account a store of value none of the above

 Question 17: Which of the following is money?
 the credit balance in your cheque account all the blank cheques left in your cheque book your Visa credit card the government bond you own

 Question 18: Which is the most liquid of these assests?
 cheque account deposits a block of land Telstra bonds Term deposit in a building society

 Question 19: Which of the following events will trigger a rightward shift of the demand for money curve?
 price level money supply interest rate real GDP rises

 Question 20: If the economy is initially at full-employment equilibrium, an increase in supply of (real) money will result in:
 a sustained increased in real GDP, but the price level falls a sustained increased in the price level, but only a tempory increase in the real GDP a sustained increased in real GDP, but only a tempory increase in the price level a sustained increased in real GDP and increase in price level

 Question 21: Under a flexible exchange rate regime, if there is a shortage of foreign exchange at the current exchange rate, the Reserve Bank will:
 sell foreign exchange buy foreign exchange impose exchange control do nothing

 Question 22: Which exchange rate regimes lets market forces determine the foreign exchange rate?
 flexible exchange rate system managed exchange rate system fixed exchange rate system none of the above

 Question 23: Which of the following gives rise to a demand for foreign exchange in Australia?
 an Australian company buys a factory in the UK an American company sends dividends to its Australian share holders Australia exports live crayfish to Japan Foreigners buy luxury apartments in Queensland

 Question 24: Which of the following is not recorded in the current account?
 net exports of goods and services Dividends paid by Australian companies to foreign share-holders Pensions paid by Australian government to elderly citizens who are now residing overseas Australia's investment overseas

 Question 25: Which of the following will lead to a reduction in Australian external debt?
 a decrease in its current account deficit an increase in its current account deficit a current account surplus a capital account surplus

This Quiz has been designed by May.