Master Monetary Policy Quiz

Master Monetary Policy Quiz

Test your knowledge on monetary policy with this comprehensive quiz consisting of 11 questions.

published on May 01
1/11

Who is responsible for making decisions on monetary policy in the United States?

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?

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?

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?

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?

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?

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