#1
3. What is the primary goal of expansionary monetary policy?
Stabilize prices
Reduce unemployment
Control inflation
Contract the economy
#2
9. Which economic variable is most directly influenced by changes in the money supply?
GDP
Unemployment Rate
Inflation Rate
Exchange Rate
#3
1. What is the main tool used by central banks to implement monetary policy?
Fiscal Policy
Exchange Rate Policy
Interest Rates
Government Spending
#4
2. Which of the following is a contractionary monetary policy measure?
Lowering interest rates
Buying government securities
Raising reserve requirements
Increasing money supply
#5
6. What is the term for the interest rate at which commercial banks can borrow money from the central bank?
Prime Rate
Discount Rate
Federal Funds Rate
Libor Rate
#6
8. What is the primary objective of a central bank's inflation targeting policy?
Achieving a high unemployment rate
Maintaining price stability
Encouraging deflation
Increasing interest rates
#7
12. What is the purpose of the dual mandate given to some central banks?
Stabilize exchange rates
Achieve full employment and price stability
Control inflation and interest rates
Maximize government revenue
#8
14. Which of the following is a tool used in open market operations?
Discount Rate
Quantitative Easing
Prime Rate
Libor Rate
#9
15. What is the term for a situation where the economy experiences both high inflation and high unemployment?
Stagflation
Hyperinflation
Deflation
Recession
#10
4. In the context of monetary policy, what does the term 'open market operations' refer to?
Buying and selling of government securities
Setting interest rates
Controlling inflation
Government spending
#11
5. How does an increase in the money supply affect interest rates, assuming other factors remain constant?
Increase in interest rates
No impact on interest rates
Decrease in interest rates
Unpredictable impact on interest rates
#12
7. How does an increase in the reserve requirement affect the money supply?
Increases the money supply
Decreases the money supply
No impact on the money supply
Unpredictable impact on the money supply
#13
10. In the context of monetary policy, what does the term 'Taylor Rule' refer to?
A formula for setting interest rates based on inflation and output gaps
A regulation governing open market operations
A measure of money supply growth
A tool for controlling fiscal policy
#14
11. Which of the following is an example of a quantitative easing policy?
Increasing interest rates
Selling government securities
Reducing reserve requirements
Buying long-term securities
#15
13. In monetary policy, what does the term 'Lender of Last Resort' refer to?
Commercial banks lending to the central bank
Central banks lending to commercial banks in times of crisis
Peer-to-peer lending
Government lending to banks
#16
16. How does a central bank influence the money supply through open market operations?
By directly controlling interest rates
By buying or selling government securities
By setting reserve requirements
By controlling inflation expectations