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This set of Macro Economics 2 Multiple Choice Questions & Answers (MCQs) focuses on Macro Economics 2 Set 2
Q1 | The lowest point in the business cycle is referred to as the:
- expansion.
- boom.
- trough.
- peak.
Q2 | When aggregate economic activity is increasing, the economy is said to be in:
- an expansion.
- a contraction.
- a peak.
- a turning point.
Q3 | When aggregate economic activity is declining, the economy is said to be in:
- a contraction.
- an expansion.
- a trough.
- a turning point.
Q4 | What are the two main components of business cycle theories?
- a description of shocks and a model of how the economy responds to them
- a model of how people decide to spend and a description of the government’s role in the economy
- a model of how equilibrium is reached and a description of the government’s role in the economy
- a description of shocks and a description of the government’s role in the economy
Q5 | Economists use the term shocks to mean:
- unexpected government actions that affect the economy
- typically unpredictable forces that have major impacts on the economy
- sudden rises in oil prices
- the business cycle.
Q6 | Wars, new inventions, harvest failures, and changes in government policy are examplesof:
- the business cycle.
- economic models.
- shocks.
- opportunity costs.
Q7 | Peaks and troughs of the business cycle are known collectively as:
- volatility.
- turning points.
- equilibrium points.
- real business cycle events.
Q8 | ISLM model was basically .............. sector model:
- two
- one
- three
- four
Q9 | ISLM model was firstly developed by …………
- hansen
- hicks
- keynes
- none
Q10 | IS curve represents the equilibrium of ............. sector.
- money
- goods
- government
- all
Q11 | Original IS-LM model is a .......... model.
- open
- closed
- both
- none
Q12 | ISLM is used to determine:
- income
- interest
- both
- all
Q13 | The goods market is otherwise referred to as:
- money
- financial
- both
- real sector
Q14 | The relationship between income and interest in the IS curve is:
- direct
- indirect
- no relation
- none
Q15 | The relationship between income and interest in the LM curve is:
- direct
- indirect
- no relation
- none
Q16 | The tax cut shift the IS curve to the:
- right
- left
- no change
- any of these.
Q17 | Increase in Government expenditure shift IS curve to:
- right
- left
- no change
- any of these.
Q18 | Decrease in money supply shift the LM curve to the:
- right
- left
- no change
- any of these.
Q19 | One of the limitations of the ISLM model was:
- static nature
- open model
- price is exogenous
- all
Q20 | Who develop the ISLM open economy model?
- mundell
- fleming
- both
- none
Q21 | For an open economy model which curve is added IS-LM?
- ms
- demand
- md
- bp.
Q22 | A temporary unemployment which exists during the period of the transfer of labor fromone occupation to another is called
- voluntary unemployment
- involuntary unemployment
- cyclical unemployment
- frictional unemployment
Q23 | When more workers are engaged in a work than actually required to work, it is called
- voluntary unemployment
- involuntary unemployment
- disguised unemployment
- frictional unemployment
Q24 | The position of IS curve depends on---
- rate of interest,
- rate of investment,
- autonomous expenditure
- none of the above
Q25 | The curve which relates the level of income with the rate of interest which is determined bymoney- market equilibrium corresponding to different levels of demand for money is known as
- is curve
- lm curve
- income curve
- none of the above.