MCQ Bank
In the Real Business Cycle (RBC) theory, which of the following is the primary driver of economic booms and recessions?
- A) Interest rates.
- B) Trade deficits.
- C) Government spending.
- D) Productivity shocks.
The equilibrium of the money market will imply overall:
- A) Labor market equilibrium.
- B) Asset market equilibrium.
- C) Capital market equilibrium.
- D) Goods market equilibrium.
Which factor primarily determines the slope of the LM curve?
- A) Aggregate demand.
- B) Real income and interest rates.
- C) Taxes.
- D) Real wages.
What key factor does the LM curve incorporate to achieve equilibrium in the money market?
- A) Consumption.
- B) Government spending.
- C) Real interest rates.
- D) Tax rates.
The influence of asset markets on the economy, including investment, consumption, financial stability, and overall performance, makes them an important component of the:
- A) Development studies.
- B) Business studies.
- C) Microeconomic Studies.
- D) Macroeconomic Studies.
Which of the following would lead to a leftward shift in the AD curve?
- A) An increase in business investment.
- B) A decrease in interest rates.
- C) A decrease in government spending.
- D) An increase in consumer wealth.
Under the Keynesian IS-LM framework, what prevents the economy from reaching full employment equilibrium automatically?
- A) Perfect competition in labor markets.
- B) Constant fiscal policy.
- C) Sticky wages and prices.
- D) Automatic monetary policy responses.
As you learned in your basic macroeconomics course, money has three core functions: medium of exchange, unit of account, and:
- A) Liability.
- B) Loanable asset.
- C) Unit of investment.
- D) Store of value.