Economic Policy and Monetary Systems Quiz

Market economy emphasizes private ownership of resources, driven by supply and demand.

GDP represents the total value of goods and services produced in a country within a specific time period.

The central bank of the United States is known as the Federal Reserve.

The IMF offers financial aid to countries facing economic difficulties.

Open market operations aim to control inflation and interest rates by buying or selling financial assets.

The exchange rate represents the rate at which one currency can be traded for another in the foreign exchange market.

Expansionary policy involves buying securities to increase money supply and stimulate economic activity.

The Federal Reserve is responsible for formulating and implementing monetary policy in the U.S.

In a floating exchange rate system, currency value is influenced by market forces, and government intervention is minimal.

The discount rate is the interest rate at which central banks lend money to commercial banks.

The gold standard links a country's currency value to a specific amount of gold.

Devaluation refers to a significant and sudden decrease in the value of a currency.

A currency board aims to keep a stable exchange rate by pegging the national currency to another, typically a major currency.

The inflation rate quantifies the average price increase of goods and services over a specific period.

Austerity involves policies aimed at reducing budget deficits through spending cuts and tax hikes.

Capitalism promotes limited government interference and emphasizes a free-market economy.

The European Central Bank is responsible for issuing and managing the Euro currency.

GDP, or Gross Domestic Product, represents the overall value of goods and services produced within a country's borders.