#1
1. What is the primary goal of monetary policy?
Maximize inflation
Minimize unemployment
Maximize government spending
Minimize interest rates
#2
2. Which central bank is responsible for monetary policy in the United States?
Bank of England
European Central Bank
Federal Reserve
Bank of Japan
#3
10. Which economic indicator is often targeted by central banks in implementing monetary policy?
Consumer Price Index (CPI)
Gross Domestic Product (GDP)
Unemployment Rate
Stock Market Index
#4
15. What is the role of the Central Bank in controlling inflation through monetary policy?
Directly setting prices
Adjusting interest rates and influencing money supply
Implementing price controls
Intervening in international trade
#5
3. What is the term for the interest rate at which banks lend to each other overnight?
Discount rate
Federal funds rate
Prime rate
Libor rate
#6
4. How does an expansionary monetary policy affect the money supply?
Increases money supply
Decreases money supply
No effect on money supply
Stabilizes money supply
#7
7. What is the purpose of the Taylor Rule in monetary policy?
Setting fiscal policy targets
Determining optimal interest rates
Controlling inflation expectations
Managing government debt
#8
8. How does a contractionary monetary policy affect the economy?
Increases economic growth
Decreases interest rates
Decreases money supply
Stabilizes inflation
#9
12. Which of the following is a tool used in open market operations by central banks?
Taxation
Currency pegging
Buying and selling government securities
Price controls
#10
5. What is the Phillips curve used to illustrate in macroeconomics?
Relationship between inflation and unemployment
Relationship between interest rates and inflation
Relationship between GDP and government spending
Relationship between exports and imports
#11
6. In the context of monetary policy, what does the term 'quantitative easing' refer to?
Increasing interest rates
Reducing the money supply
Buying financial assets to increase money supply
Lowering inflation expectations
#12
9. What is the role of the Open Market Operations (OMO) in monetary policy?
Regulating stock markets
Controlling government spending
Buying and selling government securities to influence money supply
Setting exchange rates
#13
11. What is the Fisher effect in the context of monetary policy?
Relationship between interest rates and inflation
Relationship between money supply and GDP
Expectations of future inflation affecting nominal interest rates
Government intervention in currency markets
#14
14. Which economic theory suggests that the long-run Phillips curve is vertical?
Keynesian economics
Monetarist economics
Supply-side economics
Classical economics