Monetary Policy Quiz (1)

Monetary Policy Quiz (1)

Test your knowledge on monetary policy with this informative quiz! See if you can answer all 12 questions correctly

published on January 11
1/12

What is the primary goal of monetary policy?

What is the primary goal of monetary policy?
Maintaining price stability
Maximizing economic growth
Reducing unemployment
Controlling inflation
2/12

Which central bank is responsible for monetary policy in the United States?

Which central bank is responsible for monetary policy in the United States?
Federal Reserve
European Central Bank
Bank of Japan
Bank of England
3/12

What tool does the central bank use to control money supply?

What tool does the central bank use to control money supply?
Open market operations
Fiscal policy
Foreign exchange interventions
Capital controls
4/12

Which of the following is an expansionary monetary policy tool?

Which of the following is an expansionary monetary policy tool?
Lowering interest rates
Increasing taxes
Reducing government spending
Raising reserve requirements
5/12

What happens to the money supply when the central bank sells government securities?

What happens to the money supply when the central bank sells government securities?
Money supply increases
Money supply decreases
Money supply remains unchanged
Money supply fluctuates
6/12

Which of the following is NOT a monetary policy transmission mechanism?

Which of the following is NOT a monetary policy transmission mechanism?
Interest rates
Exchange rates
Unemployment rates
Credit availability
7/12

What is the interest rate at which commercial banks can borrow from the central bank called?

What is the interest rate at which commercial banks can borrow from the central bank called?
Discount rate
Inflation rate
Prime rate
Federal funds rate
8/12

Under contractionary monetary policy, what happens to interest rates?

Under contractionary monetary policy, what happens to interest rates?
They increase
They decrease
They remain unchanged
They fluctuate
9/12

Which of the following is an example of a conventional monetary policy tool?

Which of the following is an example of a conventional monetary policy tool?
Changing reserve requirements
Quantitative easing
Negative interest rates
Helicopter money
10/12

What term is used to describe the rate at which the central bank lends to commercial banks?

What term is used to describe the rate at which the central bank lends to commercial banks?
Policy rate
Repo rate
Libor rate
Discount rate
11/12

Which of the following is an example of an expansionary fiscal policy?

Which of the following is an example of an expansionary fiscal policy?
Lowering government spending
Increasing taxes
Reducing money supply
Implementing tax cuts
12/12

What is the term for the difference between a country's total exports and total imports?

What is the term for the difference between a country's total exports and total imports?
Gross domestic product
Foreign direct investment
Trade balance
Current account