Macroeconomics MCQs

Macroeconomics MCQs for all exams


What is Gross Domestic Product (GDP)?
a) The value of all goods and services produced within a country’s borders in a specific period.
b) The value of all goods and services produced by a country’s citizens in a specific period.
c) The value of all goods and services consumed by a country’s citizens in a specific period.
Answer: a


What is inflation?
a) The rate at which the general level of prices for goods and services is increasing.
b) The rate at which the general level of prices for goods and services is decreasing.
c) The rate at which the supply of money in the economy is increasing.
Answer: a


What is fiscal policy?
a) The use of government spending and taxation to influence the economy.
b) The use of interest rates to influence the economy.
c) The use of trade policies to influence the economy.
Answer: a


What is monetary policy?
a) The use of interest rates to influence the economy.
b) The use of government spending and taxation to influence the economy.
c) The use of trade policies to influence the economy.
Answer: a


Macroeconomics MCQs


What is the Phillips curve?
a) A curve that shows the relationship between unemployment and inflation.
b) A curve that shows the relationship between GDP and inflation.
c) A curve that shows the relationship between interest rates and inflation.
Answer: a


What is the difference between nominal and real GDP?
a) Nominal GDP is adjusted for inflation, while real GDP is not.
b) Real GDP is adjusted for inflation, while nominal GDP is not.
c) Nominal GDP is adjusted for population growth, while real GDP is not.
Answer: b


What is the unemployment rate?
a) The percentage of the total population that is employed.
b) The percentage of the labor force that is unemployed.
c) The percentage of the total population that is not in the labor force.
Answer: b


What is the difference between a recession and a depression?
a) A recession is a mild economic contraction, while a depression is a severe economic contraction.
b) A recession is a severe economic contraction, while a depression is a mild economic contraction.
c) There is no difference between a recession and a depression.
Answer: a


Macroeconomics MCQs


What is the difference between a trade deficit and a trade surplus?
a) A trade deficit occurs when a country’s imports exceed its exports, while a trade surplus occurs when a country’s exports exceed its imports.
b) A trade deficit occurs when a country’s exports exceed its imports, while a trade surplus occurs when a country’s imports exceed its exports.
c) There is no difference between a trade deficit and a trade surplus.
Answer: a


What is the difference between absolute advantage and comparative advantage?
a) Absolute advantage refers to a country’s ability to produce a good more efficiently than another country, while comparative advantage refers to a country’s ability to produce a good at a lower opportunity cost than another country.
b) Absolute advantage refers to a country’s ability to produce a good at a lower opportunity cost than another country, while comparative advantage refers to a country’s ability to produce a good more efficiently than another country.
c) There is no difference between absolute advantage and comparative advantage.
Answer: a


What is the difference between monetary policy and fiscal policy?
a) Monetary policy involves the use of interest rates and the money supply to influence the economy, while fiscal policy involves the use of government spending and taxation.
b) Monetary policy involves the use of government spending and taxation to influence the economy, while fiscal policy involves the use of interest rates and the money supply.
c) There is no difference between monetary policy and fiscal policy.
Answer: a


Macroeconomics MCQs past papers mcqs


What is the difference between demand-side and supply-side economics?
a) Demand-side economics focuses on stimulating aggregate demand to boost economic growth, while supply-side economics focuses on increasing the production capacity of the economy.
b) Supply-side economics focuses on stimulating aggregate demand to boost economic growth, while demand-side economics focuses on increasing the production capacity of the economy.
c) There is no difference between demand-side and supply-side economics.
Answer: a


What is the difference between a fixed exchange rate and a floating exchange rate?
a) A fixed exchange rate is determined by the government and remains constant, while a floating exchange rate is determined by the market and can fluctuate.
b) A floating exchange rate is determined by the government and remains constant, while a fixed exchange rate is determined by the market and can fluctuate.
c) There is no difference between a fixed exchange rate and a floating exchange rate.
Answer: a


What is the difference between a budget deficit and a national debt?
a) A budget deficit occurs when government spending exceeds government revenues in a single year, while a national debt is the total amount of money owed by the government.
b) A budget deficit occurs when government revenues exceed government spending in a single year, while a national debt is the total amount of money owed by the government.
c) There is no difference between a budget deficit and a national debt.
Answer: a


Macroeconomics MCQs


What is the difference between economic growth and economic development?
a) Economic growth refers to an increase in the quantity of goods and services produced in an economy, while economic development refers to an improvement in the quality of life and well-being of a society.
b) Economic development refers to an increase in the quantity of goods and services produced in an economy, while economic growth refers to an improvement in the quality of life and well-being of a society.
c) There is no difference between economic growth and economic development.
Answer: a


What is the difference between the short-run and the long-run in macroeconomics?
a) The short-run is a period of time when some factors of production are fixed, while the long-run is a period of time when all factors of production are variable.
b) The short-run is a period of time when all factors of production are variable, while the long-run is a period of time when some factors of production are fixed.
c) There is no difference between the short-run and the long-run in macroeconomics.
Answer: a


What is the difference between nominal and real interest rates?
a) Nominal interest rates are the stated interest rates on a loan or investment, while real interest rates are adjusted for inflation.
b) Real interest rates are the stated interest rates on a loan or investment, while nominal interest rates are adjusted for inflation.
c) There is no difference between nominal and real interest rates.
Answer: a


Macroeconomics MCQs Questions and answers


What is the difference between a public good and a private good?
a) A public good is non-excludable and non-rivalrous, while a private good is excludable and rivalrous.
b) A public good is excludable and rivalrous, while a private good is non-excludable and non-rivalrous.
c) There is no difference between a public good and a private good.
Answer:


What is the difference between a recession and a depression?
a) A recession is a decline in economic activity that lasts for at least two consecutive quarters, while a depression is a severe and prolonged recession.
b) A depression is a decline in economic activity that lasts for at least two consecutive quarters, while a recession is a severe and prolonged recession.
c) There is no difference between a recession and a depression.
Answer: a


What is the Phillips curve?
a) A curve that shows the relationship between inflation and unemployment.
b) A curve that shows the relationship between interest rates and economic growth.
c) A curve that shows the relationship between government spending and taxation.
Answer: a


Macroeconomics MCQs solved


What is the difference between a trade deficit and a trade surplus?
a) A trade deficit occurs when a country imports more than it exports, while a trade surplus occurs when a country exports more than it imports.
b) A trade deficit occurs when a country exports more than it imports, while a trade surplus occurs when a country imports more than it exports.
c) There is no difference between a trade deficit and a trade surplus.
Answer: a


What is the difference between GDP and GNP?
a) GDP measures the value of goods and services produced within a country’s borders, while GNP measures the value of goods and services produced by a country’s citizens, regardless of their location.
b) GDP measures the value of goods and services produced by a country’s citizens, regardless of their location, while GNP measures the value of goods and services produced within a country’s borders.
c) There is no difference between GDP and GNP.
Answer: a


What is the difference between a recessionary gap and an inflationary gap?
a) A recessionary gap occurs when aggregate output is below potential output, while an inflationary gap occurs when aggregate output is above potential output.
b) A recessionary gap occurs when aggregate output is above potential output, while an inflationary gap occurs when aggregate output is below potential output.
c) There is no difference between a recessionary gap and an inflationary gap.
Answer: a


Macroeconomics MCQs with Answers


What is the difference between a progressive tax and a regressive tax?
a) A progressive tax is a tax that takes a larger percentage of income from higher earners, while a regressive tax takes a larger percentage of income from lower earners.
b) A progressive tax is a tax that takes a larger percentage of income from lower earners, while a regressive tax takes a larger percentage of income from higher earners.
c) There is no difference between a progressive tax and a regressive tax.
Answer: a


What is the difference between a demand shock and a supply shock?
a) A demand shock is a sudden change in consumer spending, while a supply shock is a sudden change in the availability of goods and services.
b) A supply shock is a sudden change in consumer spending, while a demand shock is a sudden change in the availability of goods and services.
c) There is no difference between a demand shock and a supply shock.
Answer: a


What is the difference between the nominal wage and the real wage?
a) The nominal wage is the amount of money paid for a job, while the real wage is the nominal wage adjusted for inflation.
b) The real wage is the amount of money paid for a job, while the nominal wage is the real wage adjusted for inflation.
c) There is no difference between the nominal wage and the real wage.
Answer: a


Macroeconomics MCQs for KPPSC Economics Lecturer


What is the difference between fiscal policy and monetary policy?
a) Fiscal policy refers to changes in government spending and taxation, while monetary policy refers to changes in the money supply and interest rates.
b) Fiscal policy refers to changes in the money supply and interest rates, while monetary policy refers to changes in government spending and taxation.
c) There is no difference between fiscal policy and monetary policy.
Answer: a


What is the difference between frictional unemployment and structural unemployment?
a) Frictional unemployment is unemployment that results from changes in the economy, while structural unemployment is unemployment that results from a mismatch between workers’ skills and available jobs.
b) Structural unemployment is unemployment that results from changes in the economy, while frictional unemployment is unemployment that results from a mismatch between workers’ skills and available jobs.
c) There is no difference between frictional unemployment and structural unemployment.
Answer: a


What is the difference between a stock and a bond?
a) A stock represents ownership in a company, while a bond represents a loan to a company or government.
b) A bond represents ownership in a company, while a stock represents a loan to a company or government.
c) There is no difference between a stock and a bond.
Answer: a


Macroeconomics MCQs/ Economics MCQs for Competitive Exams


What is the difference between expansionary monetary policy and contractionary monetary policy?
a) Expansionary monetary policy involves increasing the money supply and lowering interest rates to stimulate economic growth, while contractionary monetary policy involves decreasing the money supply and raising interest rates to reduce inflation.
b) Expansionary monetary policy involves decreasing the money supply and raising interest rates to reduce inflation, while contractionary monetary policy involves increasing the money supply and lowering interest rates to stimulate economic growth.
c) There is no difference between expansionary monetary policy and contractionary monetary policy.
Answer: a


What is the difference between a budget deficit and a national debt?
a) A budget deficit occurs when a government spends more than it collects in taxes in a given year, while a national debt is the total amount of money a government owes to its creditors.
b) A budget deficit occurs when a government collects more in taxes than it spends in a given year, while a national debt is the total amount of money a government owes to its creditors.
c) There is no difference between a budget deficit and a national debt.
Answer: a


Macroeconomics MCQs for Lecturer Economics


What is the difference between a fixed exchange rate and a floating exchange rate?
a) A fixed exchange rate is a system in which a country’s currency is pegged to the currency of another country or to a commodity, while a floating exchange rate is a system in which a country’s currency is determined by market forces.
b) A floating exchange rate is a system in which a country’s currency is pegged to the currency of another country or to a commodity, while a fixed exchange rate is a system in which a country’s currency is determined by market forces.
c) There is no difference between a fixed exchange rate and a floating exchange rate.
Answer: a


What is the difference between a recession and stagflation?
a) A recession is a decline in economic activity that is typically accompanied by falling prices, while stagflation is a situation in which the economy experiences both high inflation and high unemployment.
b) Stagflation is a decline in economic activity that is typically accompanied by falling prices, while a recession is a situation in which the economy experiences both high inflation and high unemployment.
c) There is no difference between a recession and stagflation.
Answer: a


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