77 exam-style questions on Macroeconomic objectives — topic 3.3 of Macroeconomics in the IB Economics syllabus — with answers and explanations. Samples below; the full set is free with an account.
A worker made redundant because automation has permanently removed the demand for their skills is experiencing
Answer: structural unemployment
Structural unemployment arises from a mismatch between workers' skills or location and the jobs available, often caused by technological change or shifts in the industry structure.
A university graduate spends six weeks searching for a suitable first job. This is best classified as:
Answer: frictional unemployment
Frictional unemployment is the short-term unemployment of people between jobs or entering the labour force while searching for work — it exists even in a healthy economy.
Which of the following is most likely to cause cost-push inflation?
Answer: A sharp rise in the price of imported raw materials
Cost-push inflation arises from higher production costs shifting SRAS left. The other three options increase aggregate demand and would cause demand-pull inflation.
Which group is most likely to gain from unanticipated inflation?
Answer: Borrowers with fixed-interest debts
Unanticipated inflation erodes the real value of money, so borrowers repay their fixed debts with money that is worth less — redistributing wealth from lenders and savers to borrowers.
A country's inflation rate falls from 6 % to 2 % over two years. During this period the country experienced:
Answer: disinflation
Disinflation is a fall in the rate of inflation — prices still rise, just more slowly. Deflation would require the price level itself to fall (a negative inflation rate).
Prosperia's inflation rate is 2 %, while the average inflation rate of its main trading partners is 7 %. Ceteris paribus, what is the most likely effect on Prosperia's international competitiveness?
Answer: its exports become more price-competitive abroad
With prices rising more slowly at home than abroad, Prosperia's goods become relatively cheaper, improving export competitiveness — one reason low and stable inflation is a macroeconomic objective. The typical error is reading low inflation as a disadvantage, or assuming only the exchange rate matters for competitiveness.
That was 6 of 77 Macroeconomic objectives questions.
Practise all 77 freeDefineAO1 · 1–2 marks
Give the precise meaning — one sentence, the key terms in it, no example needed unless asked.
ExplainAO2 · 2–10 marks
Give reasons or causes: say what happens AND why, linking each step with 'because' or 'so that'.
OutlineAO1 · 1–2 marks
A brief account or summary: the main points in two or three sentences, no evaluation.
77 Macroeconomic objectives questions — free with an account. Spaced repetition, streaks and full exam simulations included.
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