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Questions and Answers
What is one potential advantage of maintaining a budget surplus?
What is one potential advantage of maintaining a budget surplus?
Which of the following is a possible consequence of high taxation resulting from a budget surplus?
Which of the following is a possible consequence of high taxation resulting from a budget surplus?
What is a likely impact of reducing aggregate demand due to budget surplus measures?
What is a likely impact of reducing aggregate demand due to budget surplus measures?
How might a budget surplus impact government spending on public services?
How might a budget surplus impact government spending on public services?
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What is one of the factors to consider when evaluating the necessity of maintaining a budget surplus?
What is one of the factors to consider when evaluating the necessity of maintaining a budget surplus?
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Which of the following is NOT a reason for the LRAS curve to shift to the right?
Which of the following is NOT a reason for the LRAS curve to shift to the right?
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What is a potential downside of interventionist supply-side policies?
What is a potential downside of interventionist supply-side policies?
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Which of the following is considered a market-based supply-side policy?
Which of the following is considered a market-based supply-side policy?
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What is a potential conflict when using expansionary fiscal or monetary policy for short-run growth?
What is a potential conflict when using expansionary fiscal or monetary policy for short-run growth?
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Which of the following drawbacks is associated with market-based supply-side policies?
Which of the following drawbacks is associated with market-based supply-side policies?
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What is one reason individuals in developing countries may be reluctant to save in banks?
What is one reason individuals in developing countries may be reluctant to save in banks?
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How can low interest rates influence business investment?
How can low interest rates influence business investment?
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Which factor is NOT a determinant of business investment?
Which factor is NOT a determinant of business investment?
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What effect does the presence of spare capacity have on investment decisions?
What effect does the presence of spare capacity have on investment decisions?
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Which type of government expenditure contributes to long-term economic growth?
Which type of government expenditure contributes to long-term economic growth?
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What is the accelerator effect in economics?
What is the accelerator effect in economics?
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Which of the following primarily shifts Aggregate Demand (AD) to the right?
Which of the following primarily shifts Aggregate Demand (AD) to the right?
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Why might a government choose to increase welfare spending?
Why might a government choose to increase welfare spending?
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What situation describes a budget deficit?
What situation describes a budget deficit?
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Which type of budget deficit occurs during a recession?
Which type of budget deficit occurs during a recession?
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Which of the following is a potential pro of running a budget deficit?
Which of the following is a potential pro of running a budget deficit?
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What is a common consequence of a high national debt?
What is a common consequence of a high national debt?
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What characterizes a structural budget surplus?
What characterizes a structural budget surplus?
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Which of the following can occur due to the crowding out effect?
Which of the following can occur due to the crowding out effect?
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Which factor can outweigh the benefits of a budget deficit?
Which factor can outweigh the benefits of a budget deficit?
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What does running a budget surplus indicate?
What does running a budget surplus indicate?
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Which policy can help reduce cyclical unemployment during a recession?
Which policy can help reduce cyclical unemployment during a recession?
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What is a potential consequence of reducing minimum wages to combat real wage unemployment?
What is a potential consequence of reducing minimum wages to combat real wage unemployment?
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Which interventionist policy aims to address structural unemployment?
Which interventionist policy aims to address structural unemployment?
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What is a likely effect of contractionary monetary policy to combat demand-pull inflation?
What is a likely effect of contractionary monetary policy to combat demand-pull inflation?
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Which of the following measures is NOT effective in addressing cost-push inflation?
Which of the following measures is NOT effective in addressing cost-push inflation?
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What is a significant drawback of using expansionary fiscal policy?
What is a significant drawback of using expansionary fiscal policy?
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Which option is considered a market-based solution for reducing frictional unemployment?
Which option is considered a market-based solution for reducing frictional unemployment?
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Which is a common evaluation point regarding supply-side policies for inflation control?
Which is a common evaluation point regarding supply-side policies for inflation control?
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What is a primary goal of expansionary monetary policy?
What is a primary goal of expansionary monetary policy?
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Which of the following is a consequence of contractionary monetary policy?
Which of the following is a consequence of contractionary monetary policy?
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How does expansionary monetary policy typically influence business investment?
How does expansionary monetary policy typically influence business investment?
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Which of the following is NOT a con of expansionary monetary policy?
Which of the following is NOT a con of expansionary monetary policy?
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What does a liquidity trap indicate about interest rates?
What does a liquidity trap indicate about interest rates?
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Which is an effect of higher interest rates under contractionary monetary policy?
Which is an effect of higher interest rates under contractionary monetary policy?
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What is a potential negative impact of expansionary monetary policy on savers?
What is a potential negative impact of expansionary monetary policy on savers?
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What is one of the main factors influencing the effectiveness of expansionary monetary policy?
What is one of the main factors influencing the effectiveness of expansionary monetary policy?
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Which of the following statements is true about supply-side policies?
Which of the following statements is true about supply-side policies?
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Which condition is considered when evaluating the impact of an interest rate cut?
Which condition is considered when evaluating the impact of an interest rate cut?
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Study Notes
Macro Economic Objectives
- Trade
- Inflation
- Growth
- Employment
- Redistribution of income
- Stability
- Stable government finances
Circular Flow of Income
- Households, Firms and Government
- Government Spending (G)
- Exports (X)
- Investment (I)
- Consumption (C)
- Income (Y)
- Taxation (T)
- Imports (M)
- Savings (S)
GDP Methods
- Output = Income = Expenditure
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Description
Test your knowledge on key macroeconomic concepts, including trade, inflation, growth, and employment. This quiz also covers the circular flow of income and the methods for calculating GDP. Challenge yourself and see how well you understand the fundamentals of macroeconomics!