Macroeconomics MCQ Questions and Answers:

• Macroeconomics is the study of the behavior and performance of an economy as a whole. 
• macroeconomics mainly focuses on the aggregate changes in the economy such as unemployment, growth rate, gross domestic product, inflation, etc.
• The term “macroeconomics” was first coined by Norwegian economist Frisch in 1933.
• Specifically, macroeconomics mainly includes aggregate demand and aggregate supply theory, unemployment and inflation theory, economic cycle and economic growth theory, open economy theory, and macroeconomic policy, among which the aggregate demand-aggregate supply model is a macroeconomic model.
• Microeconomics is the foundation of macroeconomics, the analysis of macroeconomic behavior always takes a certain microscopic analysis as its theoretical basis.
• Macroeconomics believes that the level of national income reflects the level of production and employment in the entire society. When macroeconomics explains the economic cycle, it emphasizes the key role of changes in investment.

MCQ on Macroeconomics: 

1. What is macroeconomics 

(1) Macroeconomics is the branch of economics that studies the behavior and performance of an economy as a whole.

(2) Macroeconomics is the subtype of economics deals with the study of individuals, households, and firms’ behavior in decision making and allocation of resources.

(3) Macroeconomics is the social science that describes the factors that determine the production, distribution, and consumption of goods and services.

(4) None of these

Answer: 1

2. Who is the founder of macroeconomics?

(1) John Maynard Keynes

(2) Adam Smith

(3) Ragnar Frisch

(4) Hicks

Answer: 1

3. Who is known as the father of modern macroeconomics?

(1) Adam Smith

(2) J.M.Keynes

(3) Samuelson

(4) Hicks

Answer: 2

4. Study of aggregates is known as _________

(1) Macroeconomics

(2) Microeconomics

(3) Price theory

(4) Factor price determination

Answer: 1

5. Which of the following are studied in macroeconomics?

(1) Problems of unemployment, price inflation.

(2) Rate of economic growth, national income, 

(3) Gross domestic product (GDP)

(4) All of these 

Answer: 4

6. Which of the following correctly describes the nature of India’s economy?

(1) Capitalist Economy

(2) Socialist Economy

(3) Mixed Economy

(4) None of the above

Answer: 3

7. What are the four main factors of macroeconomics?

(1) Inflation.

(2) GDP (Gross Domestic Product)

(3) National Income.

(4) Unemployment levels.

(5) All of these 

Answer: 5

8. Who is used the first time word micro?

(1) Ragnar Frisch.

(2) J.M.Keynes

(3) Samuelson

(4) Hicks

Answer: 1

9. The condition in which market supply matches market demand is called 

(1) Equalisation 

(2) Normalisation

(3) Equilibrium

(4) Inflation 

Answer: 3

10. What is a method of lumping?

(1) The lumping method is a method of economic analysis used in macroeconomics to study the economy as a whole. 

(2) The slicing method is a method of economic analysis used in macroeconomics for in-depth study of economic units. 

(3) Both (1) & (2)

(4) None of these 

Answer: 1

11. What are consumption goods?

(1) Goods used for consumption in the production process

(2) Goods such as tools, machinery, etc which are used to create final consumption goods

(3) Goods and services that are consumed fully when purchased by the consumers

(4) None of the above

Answer: C

12. The function of a government by which it seeks to seek a balance of employment, demand-supply, and inflation, is known as:

(1) Distribution function

(2) Allocation function

(3) Stabilization

(4) Protection

Answer: 3

13. Which among the following could be said to be an ‘Open Economy’?

(1) A nation that follows the doctrine of Free-market and Laissez-faire economics

(2) A nation that trades with other nations in goods and services and financial assets

(3) An economy that operates without government intervention

(4) None of the above

Answer: 1

14. One of the essential conditions of “perfect competition” is__________

(1) Product differentiation

(2) Multiplicity of prices for identical products of a one time

(3) Many sellers and a few buyers

(4) Same price for same things at one time

Answer: 4

15. An increase in foreign income generally leads to:

(1) increased exports, increased domestic output

(2) decreased exports, increased domestic output

(3) decreased exports, decreased domestic output

(4) increased exports, decreased domestic output

Answer: 1

16. Zero price elasticity of demand means_______

(1) Whatever the change in price, there is absolutely no change in demand. 

(2) For a small change in price, there is a small change in demand

(3) For a small change in price, there is a large change in demand

(4) For a large change in price, there is a small change in demand

Answer: 1

17. The law of demand states that:

(1) as the demand rises, the price rises

(2) as the price rises, the demand rises

(3) as the price rises, the demand falls

(4) as supply rises, the demand rises

Answer: 3