#1
What is the primary tool used by central banks to control the money supply?
Fiscal policy
Monetary policy
Trade policy
Industrial policy
#2
Which of the following is NOT a function of commercial banks?
Issuing currency
Accepting deposits
Granting loans
Facilitating international trade
#3
What is the term for the rate at which the central bank lends money to commercial banks?
Discount rate
Prime rate
LIBOR
Federal funds rate
#4
Which of the following is a contractionary monetary policy tool?
Open market operations to buy securities
Lowering reserve requirements
Increasing the money supply
Raising interest rates
#5
Which of the following is a tool of expansionary monetary policy?
Increasing reserve requirements
Selling government securities
Raising the discount rate
Lowering interest rates
#6
What is the name for the interest rate at which banks lend reserves to each other overnight?
Federal funds rate
Discount rate
Prime rate
LIBOR
#7
Which of the following best describes the term 'quantitative easing'?
Increasing interest rates to control inflation
Reducing the money supply to combat inflation
Central bank's purchase of financial assets to inject money into the economy
Lowering interest rates to stimulate economic growth
#8
In the context of banking, what does the term 'LTV ratio' stand for?
Loan-to-Value ratio
Liquidity-to-Value ratio
Leverage-to-Value ratio
Liability-to-Value ratio
#9
What is the term for the ratio of a bank's reserves to its total deposits?
Liquidity ratio
Reserve ratio
Solvency ratio
Leverage ratio
#10
What is the term for the central bank's buying and selling of government securities?
Open market operations
Quantitative easing
Inflation targeting
Asset purchase program
#11
Which of the following is a tool of qualitative monetary policy?
Open market operations
Reserve requirements
Moral suasion
Discount rate
#12
What is the term for the percentage of deposits that banks are required to hold in reserve?
Reserve ratio
Liquidity ratio
Solvency ratio
Capital adequacy ratio
#13
What is the term for the maximum amount of money a bank is allowed to lend?
Loan cap
Credit ceiling
Loan ceiling
Credit cap
#14
In the context of monetary policy, what does the term 'Taylor rule' refer to?
A mathematical formula for determining the optimal interest rate based on inflation and output gaps
A regulation limiting bank reserves
A policy aimed at controlling exchange rates
A principle guiding quantitative easing programs