CHAPTER III😊 (6,8,9,11,14,15)

1. Which of the following would reduce the value of the multiplier?

A. More Exports B. More Investments C. More Savings D. More Government spending
2. What statement would John Maynard Keynes agree with?
A. The market should be allowed to stabilize itself
B. The government is required to keep the economy on its feet
C. Consumers dictate the economy
D. No one should be involved in the market
3. When Canadian interest rate falls, aggregate demand curve ….
A. Shift upwards B. Shift to the right c. Shift to the left D. Shift downwards
4. What are the sectors in Macroeconomics?
A. Households, Businesses, Government
B. Households and Businesses
C.GDP, Business Cycle, Inflation
D.CPI, GDP, Employment
5. The marginal propensity to consume:
A. has negative relationship to the multiplier
B. equal to one
C. represents the portion of consumers’ disposable income spent
D. all of the above
6. An increase in investment spending will:
A. see a lager increase in income due to multiplier effect
B. less income due to the multiplier effect
C. less of an increase income due to net exports effect
D. More of an increase
7. The value of the spending multiplier decreases when
A. Government spending increases B. tax rates are reduced
C. MPS increases D.MPC increases
8. Economics growth is defined as an increase in
A. Economic well being
B. Tax revenues
C. không phải 3 đáp còn lại
D. Consumption per household
9.What is the multiplier effect?
A. Initial changing spending that causes ripple effect
B. A recessionary gap caused by an increase in taxes
C. An economy at equilibrium, but keeps printing money
D. An investment that multiplies by itself over and over
10. What is the formula used to calculate the Multiplier?
A. 1/(1- MPS) B. 1/(1-MPC) C. 1/(MPS-1) D. 1/(2-MPC)
11. The multiplier effect refers to:
A. government regulations that effect the GDP
B. Any change in aggregate spending always decreases GDP
C. Changes in aggregate spending create bigger change in GDP
D. the MPS will always be greater than 1
12. Which of the following is NOT an example of an INJECTION in the economy?
A. Investment Spending B. Government Spending C. Export Spending D. Savings
13. If the MPC=o, what is the multiplier?
A. 10 B. 5 C. 2 D. 1
14. Actually investment spending in any period is equal to:
A. Planned investment spending+ unplanned inventory investment
B. Planned investment spending+ inventory decreases
C. Unplanned inventory investment + inventory increases
D. Unplanned inventory investment – inventory increases
15. An increase in which of the following will increase the value of the spending multiplier?
A. The supply of the money B. Equilibrium output
C. Personal income tax rates D. The marginal propensity to cosnume
16. When spending exceeds revenue in one fiscal year, we have a….
A. debt B. problem C. deficit D. potato
17. An increase in which of the following will NOT cause an increase in a country’s GDP ?
A. Exports B. Imports C. Investment D. Goverment Spending

Chapter IV:( (8,11,12,15,26

1. What are the two tools of fiscal policy?
A. Taxing and spending B. Spending and GDP growth
C.Taxing and interest rates D. Interest rates and reserve requirements
2. The monetary policy is:
A. Immingration laws for ownership of land
B. The control of supply of money in circulation
C. The increase of global trade tax
3.One example of contractionary fiscal policy:
A. Reduced taxes b. Increased taxes C. Increased production D. Increased spending
4. Contractionary Policy of the fiscal policy:
A. Increases government spending and reduces taxes
B. Decreases government spending and decreases taxes
 C. Decreases government spending and increased taxes
D. Increases government spending and increased taxes
5.Contractionary Policy of the fiscal policy:
A. Increases government spending and reduces taxes
B. Decreases government spending and decreases taxes
C. Decreases government spending and increased taxes
D. Increases government spending and increased taxes
6. Which of the following is a problem of fiscal policy?
A. Unstable SRAS B. Crowding- Out C. Lag- Time D. Crowding -In
7.What is fiscal policy?
A. Decisions made by the government for taxation B. A policy that’s physical
C. A monetary one D. A policy for Government so they don’t hurt each other
8. Which of the following is an example of fiscal policy?
A. Decrease the exchange rate B. Raise the minimum wage
C. Increase its budget surplus D. Reduce the rate of interest
9.Which of these is NOT a type of fiscal policy?
A. Inflationary B. Expansionary C. Contractionary D. None of these answer
10. The Expansionary Policy of the fiscal policy:
A. Increases government spending and reduced taxes
B. Decreased government spending and increased taxes
C. Increased government spending and increases taxes
D. Decreased government spending and decreased taxes
11.What is fiscal policy?
A. Policy created by Gov. corporations to control the economy
B. Policy created by Thomas Jefferson to help the economy
C. State policy that attempts to manage income
D.Gov. policy that attempts to man- age the economy
12. Which of these is NOT a form of fiscal policy …
A. Increasing VAT B. Offering Subsidies C. Lowering Income Tax D. Taxing Cigarettes
13. During an expansion, Congress would likely use fiscal policy to:
A. raise the reserve requirement B. Buy government bonds
C. Decrease interest rates D. Decrease taxes
14. Which is a part of contractionary fiscal policy?
A. Increase in the discount rate B. Decreased government spending
C. Reduction in taxes D. Buying government bonds
15. The government sometimes uses Fiscal policy to reduce …..
A. Unemployment B. AD C. AS D. Inflation
16.Expansionary Fiscal Policy is like the … on a car
A. gas B. brakes C. Steering Wheel D. Air freshener
17.Expansionary fiscal Policy results in what?
A. Increased money supply B. Shifting AD to the right
C. Shifting AD to the right D. Shifting AS to the right
18. Which of these is a part of discretionary fiscal policy?
A. Tax cuts B. Social Security C. Medicaid D. deregulation
19.What fiscal policy tools can be used to expand the economy?
A. Decrease government spending B. Cutting taxes C. Both answers D. Neither answer
20.An appropriate fiscal policy for a severe recession is:
A. A decrease in government spending B. A decrease in tax rates
C. Appreciation of the dollar D. An increase in interest rates
21.Which of the following is an example of expansionary fiscal policy?
A. Increasing taxes B. Increasing government spending
C. Decreasing government transfers D. Decreasing interest rates
22. Which one of these takes place in contractionary fiscal policy?
A. Increases aggregate demand B. Increases employment
C. Raise the price level D. Decreasing aggregate demand
23. What is the biggest limiting factor to the success of the discretionary fiscal policy?
A. Foreign buyers B. People who collect disability
C. Lags in policy D. Fed changes to interest rates
24. What is a trade surplus?
A. Xn>0, more exports than imports
B. Xn<0, more imports than exports
C. The relative price of domestic and foreign goods
D. Reduces savings and shifts the supply curve to the left.
25. What was the Open Door Policy?
 A. Everyone is allowed in China
B. China ‘s inhabitants allow US citizens to stay with them
C. China’s trading ports are completely open to other countries
D. Africa is allowed to go to Asia
26. Discretionary fiscal policy refers to:
A. Any in govt. spending or taxes that destabilizes economy
B. Authority President has to personal income tax rates
C. in taxes and govt. expenditures made to stabilize economy
D. In taxes and transfers that occur as GDP As
27.A trade deficit impacts on Aggregate Demand because:
A. Exports are a leakage from the circular flow of income
B. Jobs may be lost overseas resulting in lower tax revenues
C. FDI inflows may boost investment
D. All of the above
28.What are the instruments for Fiscal Policy?
A. Interest rates and money supply B. Government spending and taxation
C. Quantitative Easing D. Inflation
29.What is Expansionary Fiscal Policy?
A. An increase in government spending and/ or cut in taxation
B. A decrease in government in spending and/ or rise in taxation
C. Government lending to businesses using ‘ soft loans’
D. A decrease in interest rates by the BoE to stimulate economic growth
30. Household provide resources for the economy by…
A. not consuming goods B. providing loans C. providing labor D. Increasing taxes

Chapter V: (1,2
1. Which of these is not a goal of monetary policy?
A.Discount rate stability B. Economic growth
B.Price stability D. Interest rate stability
2. What is the primary role of money in the economy..
A. Set interest rates B. Assist foreign trade
C. identify prices D. medium of exchange
3. When the money supply is increased, which is most likely to happened?
A. The price level will increase B. The price level will decrease
B. The price level be able to buy more goods D. The price level will not be affected
4. According to the quantity theory of money, what is the primary cause of inflation?
A. Increase in RGDP B. Increasing in Prices
C. Increase in velocity D. Increase in Money Supply
5.Which of the following is not considered money?
A. Currency B. Checkable Deposits
C. Comic Book Collection D. Savings
6.What are the components pf the M1 Money Supply?
A. Checkable deposits, traveler’s checks, savings
B. Checkable deposits, money in circulation, savings
C. Everything in M2 plus savings
D. Checkable deposits, money in circulation, traveler’s checks
7. What is definition of Money Multiplier?
A. The purchase or sale of government securities
B. The Fed’s main policy- making committee
C. Number by which a change in the monetary base is multiplied
D. A bank’s actual reserves minus its desired reserves
8. Decreasing the Money Supply results in:
A. A lower interest rate B. A higher interest rates
C More money available
9. When the money supply is increased what is likely to happen?
A. price level decrease B. price levels stays the same
C. The dollar will be able to buy more goods D. The price level will increase
10. A central bank that desires to reduce the quantity of money in the economy can:
A. raise the reserve requirement B. Buy bonds in open market operations
C. Lower the discount rate D. Engage in quantitative easing
11. Which reserve requirements lets the Central Bank have the greatest impact on the money
supply?
A. 5% reserve requirement B. 10% reserve requirement
C.15% reserve requirement D. 100% reserve requirement
12. Which of the following institutions determines the quantity of money in the economy as
impt:
A. Department of the Treasury B. Federal Open Market Committee
C. Central Bank D. Federal Reserve board of Governors
13. What is the relationship between the required reserve ratio and the simple money multiplier:
A. The simple money multiplier is 1/r B. The simple money multiplier is 100/r
C. The simple money multiplier is r*100 D. No relationship
14. Which is NOT a method by which the Central Bank expands or contracts the money supply?
 A. Regulates the money supply through Open Market Operations
B. Through changes in the required reserve ratio
C. Changes in the discount rate it charges to member banks
D. Changes in requirements concerning fiat and commodity money
15. The max change in the money supply: new deposits of $5.000 and a reserve ratio of 10%
A. $ 4500 B. $5000 C. 45000 D. 50.000
16.Which of these NOT a function of a central bank?
A. Lender of the last report B. Managing the public debt
C. Exchanging foreign currencies D. Setting interest rates and controlling the money supply
17. A central bank is not responsible for:
A. Implementing monetary policy B. Implementing fiscal policy
C. Keep a eye on economic system D. Change interest rate
18. Which term describes the main function of the central bank?
A. Provides banking services to the public B.Lender of last resort to order banks
C. Stablises economy by using monetary policy D. Is a shareholder