Economic Measures and Monetary Policy Quiz

Test your knowledge of monetary policy with these questions on tools, objectives, and central bank functions. Explore monetary economics now!

#1

Which of the following is a tool of monetary policy?

Fiscal deficit
Exchange rate
Government spending
Open market operations
#2

Which of the following is NOT a tool of monetary policy?

Open market operations
Reserve requirement
Taxation
Discount rate
#3

What is the name of the central bank of the European Union?

European Central Bank
Bank of England
Federal Reserve System
Bank of Japan
#4

What is the name of the policy that involves increasing the money supply to stimulate economic activity?

Tight monetary policy
Expansionary monetary policy
Contractionary monetary policy
Neutral monetary policy
#5

What is the term for the phenomenon where prices of goods and services rise over time?

Inflation
Deflation
Stagflation
Recession
#6

What is the main objective of contractionary monetary policy?

Stimulate economic growth
Control inflation
Reduce unemployment
Encourage borrowing and spending
#7

What is the name given to the interest rate at which the central bank lends money to commercial banks?

Prime rate
Discount rate
Federal funds rate
Libor rate
#8

What does an increase in the reserve requirement by the central bank typically lead to?

Increased money supply
Decreased money supply
Higher interest rates
Lower interest rates
#9

What is the term for the situation when a country's imports exceed its exports?

Trade surplus
Trade deficit
Current account surplus
Current account deficit
#10

Which of the following is NOT a goal of monetary policy?

Stable prices
Low unemployment
High economic growth
Financial stability
#11

In a recessionary gap scenario, what type of monetary policy is typically employed?

Expansionary
Contractionary
Neutral
Fiscal
#12

What is the term used to describe the phenomenon where an increase in the money supply leads to a proportional increase in price levels?

Deflation
Hyperinflation
Stagflation
Quantity theory of money
#13

What is the primary function of the Federal Reserve System in the United States?

Stabilize foreign exchange rates
Regulate stock markets
Conduct monetary policy
Set fiscal policy
#14

In the context of monetary policy, what is the term for the rate at which banks lend reserves to each other overnight?

Federal funds rate
Prime rate
Discount rate
Libor rate
#15

What is the name of the committee that sets the key interest rate in the United States?

Monetary Policy Committee
Federal Open Market Committee
Board of Governors
Senate Finance Committee

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