#1
Which of the following is a tool used by central banks to influence the money supply?
Fiscal policy
Monetary policy
Trade policy
Industrial policy
#2
What is the main objective of monetary policy?
Maximizing employment
Minimizing inflation
Stabilizing the economy
Controlling exchange rates
#3
Which of the following is NOT a function of money?
Medium of exchange
Store of value
Unit of labor
Standard of deferred payment
#4
Which of the following is NOT a tool of monetary policy?
Open market operations
Reserve requirements
Taxation
Discount rate
#5
Which of the following is a tool used by central banks to increase the money supply?
Open market operations
Raising reserve requirements
Lowering interest rates
Selling government securities
#6
What is the term for the interest rate at which the central bank lends to commercial banks?
Federal funds rate
Prime rate
Discount rate
LIBOR rate
#7
What happens to the money supply when the central bank conducts open market operations to buy government securities?
Money supply increases
Money supply decreases
Money supply remains unchanged
Money supply fluctuates randomly
#8
What is the term for the ratio of reserves to deposits that banks are required to maintain?
Interest rate
Liquidity ratio
Reserve ratio
Margin requirement
#9
When the central bank decreases the discount rate, what effect does it have on the money supply?
Money supply increases
Money supply decreases
Money supply remains unchanged
Effect depends on other factors
#10
What is the term for the buying and selling of government securities by the central bank to control the money supply?
Exchange rate intervention
Reserve requirement adjustment
Open market operations
Quantitative easing
#11
Which of the following actions by the central bank is contractionary monetary policy?
Buying government securities
Lowering reserve requirements
Raising the discount rate
Increasing the money supply
#12
Which of the following best describes the concept of 'money multiplier'?
The ratio of money supply to GDP
The ratio of reserves to deposits
The ratio of currency to reserves
The ratio of deposits to currency
#13
What is the term for the ratio of the money supply to the monetary base?
Money multiplier
Liquidity ratio
Reserve ratio
Margin requirement
#14
Which of the following is a feature of a currency board?
It can engage in discretionary monetary policy
It is backed by a commodity such as gold
It can adjust exchange rates freely
It maintains a fixed exchange rate with another currency