Master Monetary Policy Quiz Test your knowledge on monetary policy with this comprehensive quiz consisting of 11 questions. alina90 published 16 days ago0 responses 0 « Previous Next » Questions in vertical order 1/11 Who is responsible for making decisions on monetary policy in the United States? Federal Reserve Department of Treasury IRS SEC 2/11 What is the main tool used by central banks to influence monetary policy? Interest rates Taxes Government spending Exchange rates 3/11 What is the goal of expansionary monetary policy? Stimulate economic growth Control inflation Reduce unemployment Stabilize exchange rates 4/11 Which of the following is NOT a tool of monetary policy? Tariffs Open market operations Reserve requirements Discount rates 5/11 What does a contractionary monetary policy aim to do? Reduce inflation Stimulate economic growth Increase government spending Lower interest rates 6/11 Which of the following statements is true about monetary policy? It is controlled by the central bank It involves direct government spending It does not impact inflation rates It is set by the President of the United States 7/11 What impact does increasing interest rates have on borrowing and spending? Decreases borrowing and spending Increases borrowing and spending No impact on borrowing and spending Stabilizes borrowing and spending 8/11 Which of the following is an example of an expansionary monetary policy action? Lowering interest rates Increasing reserve requirements Selling government securities Raising discount rates 9/11 Why does the Federal Reserve use monetary policy to stabilize the economy? To promote full employment and stable prices To increase income inequality To manipulate stock prices To control government spending 10/11 Which of the following is a long-term effect of expansionary monetary policy? Inflation Deflation High unemployment Stagnant economic growth 11/11 What is the primary reason for a central bank to adjust monetary policy? To achieve macroeconomic objectives To increase government debt To control foreign exchange rates To regulate consumer spending
