Intermediate Macroeconomics
Review Questions
Course Introduction
Intermediate Macroeconomics builds on foundational economic principles to deepen students understanding of the behavior and interrelationships of aggregate economic variables such as gross domestic product (GDP), unemployment, inflation, interest rates, and economic growth. The course explores the theoretical frameworks underpinning macroeconomic analysis including Keynesian, classical, and modern schools of thought and applies these models to evaluate the effects of fiscal and monetary policy, open-economy dynamics, and macroeconomic stabilization. Through analytical tools and real-world case studies, students gain proficiency in assessing contemporary economic challenges and policy debates.
Recommended Textbook
Macroeconomics Australia in the Global Environment 1st Australian Edition by Michael Parkin
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17 Chapters
2734 Verified Questions
2734 Flashcards
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Chapter 1: Getting Started
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272 Verified Questions
272 Flashcards
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Sample Questions
Q1) The Latin term 'ceteris paribus' means
A)'other things remaining the same.'
B)'what is true of the whole is not necessarily true of the parts.'
C)'after this,therefore because of this.'
D)'false unless proven true.'
E)'obviously true.'
Answer: A
Q2) Which of the following best defines economics?
A)Economics is concerned with prices and quantities of goods and services,both at the individual level and at the industry level.
B)Economics helps you earn as much money as possible.
C)Economics studies how to choose the best alternative when coping with scarcity.
D)Economics analyses all aspects of human behaviour in general.
E)Economics teaches how to limit our wants.
Answer: C
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Chapter 2: The Australian and Global Economies
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171 Verified Questions
171 Flashcards
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Sample Questions
Q1) In the circular flow model,rent,wages,interest and profit paid flow from ________ through ________ to ________.
A)firms;goods markets;households
B)households;goods markets;firms as payment for goods
C)firms;factor markets;households
D)households;factor markets;firms
E)firms;goods markets;firms
Answer: C
Q2) Dividing the nation's income among the factors of production,the largest percentage is paid to A)labour.
B)labour and capital,with each receiving about 41 per cent of the total income. C)land.
D)capital.
E)entrepreneurship.
Answer: A
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Chapter 3: The Economic Problem
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218 Verified Questions
218 Flashcards
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Sample Questions
Q1) If a country has
A)a comparative advantage in the production of a good,it must also have an absolute advantage in producing that good.
B)an absolute advantage in producing a good,it might or might not have a comparative advantage in producing that good.
C)an absolute advantage in producing a good,it definitely also has a comparative advantage in producing that good.
D)an absolute advantage in producing a good,it definitely will not have a comparative advantage in producing that good.
E)None of the above answers is correct.
Answer: B
Q2) Points inside the PPF are all
A)attainable and have some unemployed resources.
B)unattainable and have some unemployed resources.
C)unaffordable.
D)unattainable and have fully employed resources.
E)attainable and have fully employed resources.
Answer: A
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Chapter 4: Demand and Supply
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144 Verified Questions
144 Flashcards
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Sample Questions
Q1) The above figure shows the market for t-shirts.If the price of t-shirts is $8,then
A)there is a shortage and the price of t-shirts will rise.
B)there is a shortage and the price of t-shirts will fall.
C)the market is in equilibrium.
D)there is a surplus and the price of t-shirts will rise.
E)there is a surplus and the price of t-shirts will fall.
Q2) A change in the demand for apples could result from any of the following EXCEPT
A)a change in income.
B)a change in the number of buyers.
C)a change in the price of an apple.
D)a change in the price of a banana.
E)increased preferences for fresh fruit consumption for health reasons.
Q3) A decrease in the price of a complement in production leads to
A)no change in the supply of the good in question.
B)an increase in the supply of the good in question and a decrease in the quantity supplied of the good in question.
C)a decrease in the quantity supplied of the good in question.
D)an increase in the supply of the good in question.
E)a decrease in the supply of the good in question.
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Page 6
Chapter 5: Gdp: a Measure of Total Production and Income
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135 Verified Questions
135 Flashcards
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Sample Questions
Q1) The largest expenditure category in Australia is
A)government expenditure on goods and services.
B)net exports of goods and services.
C)wages.
D)investment.
E)consumption expenditure.
Q2) Which of the following is included as investment in GDP?
i.Cars produced during the year but unsold at the end of the year.
Ii New capital equipment produced and purchased during the year.
iii.Purchases of a company's shares and bonds.
A)i and ii
B)i,ii and iii
C)iii only
D)i only
E)ii only
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Page 7
Chapter 6: Jobs and Unemployment
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133 Verified Questions
133 Flashcards
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Sample Questions
Q1) The unemployment rate is the
A)percentage of the labour force that does not have a job.
B)number of unemployed people.
C)percentage of employed people that do not have a job.
D)percentage of the population that does not have a job.
E)percentage of the working-age population that does not have a job.
Q2) Jane is a 25 year old,full-time student.She works part-time in her school library and is paid $17 an hour.She is considered to be
A)unemployed.
B)not in the labour force.
C)employed.
D)in the labour force but not working.
E)not in the working-age population because she is at university.
Q3) The natural unemployment rate
A)is easy to measure.
B)includes only frictional and structural unemployment.
C)is equal to zero when there are no economic fluctuations.
D)is very stable in value across time.
E)includes some frictional,structural and cyclical unemployment.
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Page 8
Chapter 7: The Cpi and the Cost of Living
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131 Verified Questions
131 Flashcards
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Sample Questions
Q1) The real interest rate equals the
A)nominal interest rate - the inflation rate.
B)(nominal interest rate ÷ the inflation rate).
C)(nominal interest rate + the inflation rate)× 100.
D)inflation rate - the nominal interest rate.
E)nominal interest rate + the inflation rate.
Q2) If the nominal wage is $30 in 2015 and the CPI is 202 in 2015,then the real wage in the base year
A)is $29.00.
B)is $14.85.
C)is $1.48.
D)is $30.
E)cannot be calculated without the past year wage rate.
Q3) The core inflation rate is
A)the annual percentage change in the GDP deflator.
B)the annual percentage change in the chain price index of Household Final Consumption Expenditure.
C)the annual percentage change in the trimmed-mean CPI.
D)the annual percentage change in the CPI.
E)All of the above.
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Chapter 8: Economic Growth
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138 Verified Questions
138 Flashcards
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Sample Questions
Q1) If real GDP grows at a rate of 6 per cent and population grows at a rate of 2 per cent,then real GDP per person grows at a rate of A)8 per cent.
B)0.5 per cent.
C)4 per cent.
D)2 per cent.
E)-3 per cent.
Q2) If a country experiences a real GDP growth rate of 1 per cent and population growth of 2 per cent,then the growth rate of real GDP per person is A)2 per cent.
B)0 per cent.
C)3 per cent.
D)1 per cent.
E)-1 per cent.
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Chapter 9: Finance,saving and Investment
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157 Verified Questions
157 Flashcards
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Sample Questions
Q1) In the figure above,the shift in the supply of loanable funds curve from SLF to SLF could be the result of
A)an increase in expected future disposable income.
B)an increase in the expected rate of profit.
C)an increase in the real interest rate.
D)an increase in disposable income.
E)a decrease in wealth.
Q2) The Ricardo-Barro effect argues that the crowding-out effect
A)is stronger when the government runs a budget surplus than when it runs a budget deficit.
B)is the result of a government budget surplus and higher interest rates.
C)is the result of the government budget deficit and higher interest rates.
D)will occur,because the private saving supply will change to offset any change in the government budget deficit.
E)will not occur,because the private saving supply will change to offset any change in the government budget deficit.
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Chapter 10: Money,the Price Level and Inflation
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213 Verified Questions
213 Flashcards
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Sample Questions
Q1) The two policy tools the Reserve Bank uses to influence the interest rate and regulate the amount of money circulating in the economy are
A)setting the cash rate and the market interest rate.
B)credit easing and setting the required reserve ratio.
C)open market operations and setting the cash rate.
D)open market operations and setting tax rates.
E)open market operations and setting the excess reserve ratio.
Q2) If required reserves are 20 per cent and the Reserve Bank buys $10,000 worth of government securities,what is the change in the banks' total reserves?
A)$8,000
B)$100,000
C)$20,000
D)$10,000
E)$2,000
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12
Chapter 11: Aggregate Supply and Aggregate Demand
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176 Verified Questions
176 Flashcards
Source URL: https://quizplus.com/quiz/30531
Sample Questions
Q1) If the costs of production decrease,there is
A)an increase in the quantity of real GDP supplied and a movement up along the AS curve.
B)an increase in aggregate supply and the AS curve shifts rightward.
C)a decrease in the quantity of real GDP supplied and a movement down along the AS curve.
D)an increase in aggregate supply and the AS curve shifts leftward.
E)a decrease in aggregate supply and the AS curve shifts leftward.
Q2) An increase in ________ increases potential GDP and ________ aggregate supply.
A)the money wage rate;decreases
B)technology;decreases
C)the money price of oil;decreases
D)technology;increases
E)the money wage rate;increases
Q3) Initially,demand-pull inflation will
A)increase the price level and not change real GDP.
B)increase the price level and decrease real GDP.
C)shift the aggregate supply curve rightward.
D)increase both the price level and increase real GDP.
E)decrease potential GDP.
Page 13
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Chapter 12: Aggregate Expenditure Multiplier
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189 Verified Questions
189 Flashcards
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Sample Questions
Q1) In the figure above,if the MPC increased,the aggregate expenditure lines would ________ and the multiplier would ________ in value.
A)become less steep;rise
B)become steeper;rise
C)not change;rise
D)not change;fall
E)become steeper;fall
Q2) When the real interest rate falls,the consumption function
A)shifts upward.
B)shifts downward.
C)does not shift and there is no movement along the consumption function.
D)does not shift and there is a movement downward along the consumption function.
E)does not shift and there is a movement upward along the consumption function.
Q3) As disposable income ________ planned consumption expenditure ________.
A)increases;increases
B)increases;changes only if net taxes also change
C)increases;decreases
D)decreases;increases
E)decreases;remains the same,since it is autonomous expenditure
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Page 14
Chapter 13: The Short-Run Policy Trade Off
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134 Verified Questions
134 Flashcards
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Sample Questions
Q1) If the Reserve Bank decides that it wants to lower the unemployment rate,it ________ the growth rate of aggregate demand by ________ the growth rate of money and ________ interest rates.
A)accelerates;accelerating;raising B)reduces;accelerating;lowering C)accelerates;accelerating;lowering D)accelerates;reducing;lowering E)accelerates;reducing;raising
Q2) If the economy moves upward along its short-run Phillips curve,in the AS-AD diagram,this movement is shown by a A)rightward shift of potential GDP.
B)rightward shift of the AS curve and a movement along the AD curve.
C)movement upward along the AS curve as a result of a rightward shift of the AD curve.
D)movement downward along the AS curve as a result of a leftward shift of the AD curve. E)leftward shift of the AS curve and a movement along the AD curve.
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15
Chapter 14: Fiscal Policy
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148 Verified Questions
148 Flashcards
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Sample Questions
Q1) As contrasted to the Keynesian view,mainstream economists believe that ________ than Keynesian economists believe.
A)the effects from fiscal stimulus are weaker
B)the multiplier effect is larger
C)potential GDP is less important
D)any crowding-out effect is smaller
E)the real GDP growth rate is larger
Q2) The two chief reasons why deficits and debt matter are that they i.lower credit ratings and increase interest rates.
Ii)redistribute consumption across generations.
Iii)create an income gap.
A)i only
B)ii only
C)i and ii
D)ii and iii
E)i,ii and iii
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Page 16
Chapter 15: Monetary Policy
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108 Verified Questions
108 Flashcards
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Sample Questions
Q1) In the long run,the real interest rate is determined by A)the expected inflation rate.
B)savings supply and investment demand.
C)the multiplier effect.
D)Reserve Bank actions.
E)the nominal interest rate.
Q2) In the short run,lowering the cash rate shifts the aggregate demand curve ________ so that real GDP ________ and the price level ________.
A)rightward;increases;rises B)leftward;decreases;rises C)leftward;decreases;falls D)rightward;decreases;rises E)rightward;increases;falls
Q3) If the Reserve Bank lowers the cash rate,eventually the
A)AD curve shifts leftward,decreasing real GDP and lowering the price level.
B)AS curve shifts leftward,decreasing real GDP and raising the price level.
C)AD curve shifts leftward,decreasing real GDP and raising the price level.
D)AD curve shifts rightward,increasing real GDP and raising the price level.
E)AS curve shifts rightward,decreasing real GDP and raising the price level.
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Page 17
Chapter 16: International Trade Policy
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122 Verified Questions
122 Flashcards
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Sample Questions
Q1) The above figure shows the Australian market for thongs.With no international trade,the price in Australia for thongs is ________.With international trade,the price in Australia for thongs is ________.
A)$12;$14
B)$500;$300
C)$14;$12
D)$500;$700
E)$700;$300
Q2) Who gains from international trade?
A)Only the exporting nation.
B)Only the importing nation.
C)Both the importing and the exporting nations.
D)Neither the importing nor the exporting nations.
E)The gains depend on which nation gets to keep the total revenue from the sale.
Q3) The infant-industry argument is used by those who assert they want to
A)limit imports to protect new industries.
B)limit exports.
C)encourage foreign firms to dump in Australia.
D)increase exports to encourage the growth of new industries.
E)increase imports to earn money to support new industries.
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Chapter 17: International Finance
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145 Verified Questions
145 Flashcards
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Sample Questions
Q1) Australia currently is
A)a creditor nation and has been since 1989.
B)neither a debtor nation nor a creditor nation.
C)a debtor nation and has been since the end of World War II in 1945.
D)a debtor nation and has been since 1989.
E)a creditor nation and has been since the end of World War II in 1945.
Q2) A nation that has invested more in the rest of the world than other countries have invested in it is called a
A)creditor nation.
B)debtor nation.
C)net lender.
D)net borrower.
E)saver nation.
Q3) If the U.S.dollar falls from 1.25 euros to 1.00 euro,then the U.S.dollar has ________ and the euro has ________.
A)depreciated;appreciated
B)shrunk;grown
C)appreciated;depreciated
D)depreciated;depreciated
E)appreciated;appreciated
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