#1
Which of the following is a characteristic of fiat money?
It has intrinsic value based on the material it's made of.
Its value is derived from the government decree.
It is backed by a commodity like gold or silver.
It is not accepted universally as a medium of exchange.
#2
What is the primary function of a central bank?
To regulate fiscal policy
To regulate international trade
To regulate monetary policy
To regulate environmental policies
#3
Which of the following is a characteristic of commodity money?
Its value is determined by government decree.
It is backed by the full faith and credit of the government.
It has intrinsic value based on the material it's made of.
Its value is not tied to any physical substance.
#4
What does M1 measure in monetary economics?
The total value of physical currency
The total value of physical currency plus demand deposits
The total value of physical currency plus demand deposits plus time deposits
The total value of physical currency plus savings deposits
#5
What is the term used to describe the interest rate at which banks lend reserves to each other overnight?
Prime rate
Discount rate
Federal funds rate
LIBOR
#6
Which of the following is NOT a function of money?
Medium of exchange
Store of value
Unit of labor
Unit of account
#7
What is the term used to describe the process of increasing the money supply in an economy?
Tightening
Contractionary monetary policy
Expansionary monetary policy
Stabilization
#8
Which of the following is a tool of monetary policy used by central banks?
Fiscal stimulus
Quantitative easing
Tariffs
Corporate taxation
#9
What is the 'Liquidity Trap' in economics?
A situation where interest rates are very high
A situation where consumers prefer to hold onto cash rather than spend or invest
A situation where there is excessive inflation
A situation where there is a lack of government intervention in the economy
#10
What is the term used to describe the purchase of government securities by the central bank from the open market?
Quantitative easing
Fiscal stimulus
Open market operations
Expansionary monetary policy
#11
In the context of central banking, what does 'Reserve Requirement' refer to?
The amount of money the central bank holds in reserve
The percentage of deposits that banks must hold in reserve
The amount of gold reserves a country must maintain
The amount of foreign currency reserves a country must maintain
#12
What is the term used to describe the total amount of money in circulation in an economy?
Monetary base
M2
Money supply
Velocity of money
#13
Which of the following is a characteristic of hyperinflation?
Inflation rate exceeding 10% per year
Moderate increase in the price level
Inflation rate exceeding 50% per month
Stable prices over time
#14
What is the term used to describe the practice of adjusting the money supply to influence economic activity?
Inflation targeting
Monetary policy
Fiscal policy
Trade policy
#15
What is the term used to describe the rate at which one currency can be exchanged for another?
Interest rate
Exchange rate
Inflation rate
Deflation rate
#16
What is the term used to describe a situation where a country's imports exceed its exports?
Trade surplus
Trade deficit
Balance of payments
Current account
#17
What is the term used to describe a situation where there is a general decrease in the price level of goods and services?
Inflation
Deflation
Stagflation
Hyperinflation
#18
What is the term used to describe a situation where there is a simultaneous occurrence of inflation and stagnation in an economy?
Stagflation
Hyperinflation
Deflation
Recession
#19
In the context of monetary policy, what is 'Forward Guidance'?
A tool used to predict future inflation rates.
A communication strategy used by central banks to influence expectations about future policy actions.
A technique used to regulate the money supply.
A method of setting interest rates based on market expectations.