#1
Which of the following is a tool used by central banks to control the money supply?
Fiscal policy
Monetary policy
Trade policy
Industrial policy
#2
What is the primary goal of expansionary fiscal policy?
To decrease government spending
To reduce taxes
To decrease aggregate demand
To stimulate economic growth
#3
What is the primary tool used by central banks to implement monetary policy?
Open market operations
Quantitative easing
Tariffs
Subsidies
#4
Which of the following is an example of an automatic stabilizer in fiscal policy?
Unemployment insurance
Corporate tax cuts
Infrastructure spending
Bailouts for struggling industries
#5
Which of the following is a measure of income inequality?
GDP per capita
Consumer Price Index (CPI)
Gini coefficient
Labor force participation rate
#6
Which of the following is a characteristic of contractionary monetary policy?
Decreasing interest rates
Increasing government spending
Decreasing the money supply
Lowering taxes
#7
What is the 'Phillips Curve' used to illustrate?
The relationship between inflation and unemployment
The relationship between government spending and economic growth
The relationship between interest rates and investment
The relationship between exchange rates and exports
#8
What does the term 'stagflation' refer to?
A combination of high inflation and high unemployment
A period of strong economic growth
A decline in prices across the economy
A situation where the money supply exceeds economic output
#9
Which of the following is a goal of supply-side economics?
Reducing income inequality
Stimulating aggregate demand
Promoting economic growth through tax cuts and deregulation
Increasing government spending on social programs
#10
Which of the following is a tool of expansionary monetary policy?
Increasing reserve requirements
Selling government securities
Decreasing the discount rate
Raising taxes
#11
In the context of macroeconomic policy, what does the term 'crowding out' refer to?
Increased private sector investment due to government spending
Decrease in private sector investment due to government borrowing
A decrease in government spending to balance the budget
The process of reducing inflation through monetary policy
#12
What is the primary objective of a contractionary fiscal policy?
To decrease government spending
To reduce taxes
To decrease aggregate demand
To stimulate economic growth
#13
What does the term 'liquidity trap' refer to?
A situation where interest rates are high, leading to decreased borrowing and spending
A situation where interest rates are low, and saving rates are high
A situation where monetary policy becomes ineffective due to very low interest rates
A situation where the money supply exceeds economic output
#14
In the context of monetary policy, what does 'quantitative easing' involve?
Increasing interest rates to control inflation
Decreasing government spending
Increasing the money supply by purchasing government securities
Reducing taxes to stimulate economic growth
#15
What is the term for the situation where an economy experiences a prolonged period of declining economic activity?
Recession
Inflation
Boom
Depression