Economics Micro & Macro (CliffsAP)

12. 
    

    According to Keynesians, what will an increase in
    spending and a decrease in taxes do to
    consumption and unemployment?
    A. A decrease in consumption, an increase in
    unemployment
    B. A decrease in consumption, no change in
    unemployment
    C. An increase in consumption, a decrease in
    unemployment
    D. An increase in consumption, an increase in
    unemployment
    E. No change in consumption, a decrease in
    unemployment

    
    


13. 
    

    Which of the following is the best solution for a
    recession?
    A. Increased taxes, increased spending
    B. Decreased taxes, increased spending
    C. Decreased taxes, decreased spending
    D. Increased taxes, decreased spending
    E. None of the above

    
    


14. 
    

    If the economy is functioning at full employment,
    and an increase in income tax with a reduction of
    government spending is implemented to reduce
    government debt, which of the following is most
    likely to occur?
    A. An increase in employment
    B. An increase in the inflation rate
    C. A decrease in employment
    D. An increase in government debt
    E. A decrease in the price level

    
    

15. To protect domestic producers, a country poses a

tariff on an imported good (X); which of the

following is likely to occur?

A. An increase in the production of X

B. A decrease in the price for X

C. An increase in the price for X

D. A decrease in the quantity of X

E. Both C and D

16. When two countries decide to specialize and trade,

which of the following will occur?

A. The goods the countries are trading become

more expensive.

B. The goods the countries are trading become

scarcer.

C. Unemployment will increase in both

countries.

D. There will be more efficient production of

the traded goods.

E. Both countries will be producing at less

efficient rates.

17. Which of the following situations would have a
    positive impact on GDP for the United States?
    A. An increase in the production of Canadian
    chairs
    B. An increase in domestic consumption
    spending
    C. A decrease in foreign trade
    D. An decrease in quotas
    E. A decrease in tariffs

Macroeconomics Full-Length Practice Test 2

Macroeconomics Full-Length

Practice Test 2

GO ON TO THE NEXT PAGE