Monetary Policy Quiz

Monetary Policy Quiz

Test your knowledge about monetary policy and its impact on the economy.

published on September 24, 2023
1/10

What is the main aim of monetary policy?

What is the main aim of monetary policy?
Stabilizing employment
Controlling inflation
Promoting economic growth
2/10

Which organization is responsible for monetary policy in the United States?

Which organization is responsible for monetary policy in the United States?
Federal Reserve
World Bank
International Monetary Fund
3/10

What tool does the central bank use to influence interest rates?

Fiscal policy
Open market operations
Monopolistic competition
4/10

When the central bank decreases the money supply, what is the likely effect on interest rates?

When the central bank decreases the money supply, what is the likely effect on interest rates?
They decrease
They increase
They remain unchanged
5/10

What is the term used for the interest rate at which commercial banks borrow from the central bank?

What is the term used for the interest rate at which commercial banks borrow from the central bank?
Prime rate
Federal funds rate
Discount rate
6/10

Which of the following is an expansionary monetary policy?

Which of the following is an expansionary monetary policy?
Decreasing government spending
Increasing reserve requirements
Lowering interest rates
7/10

What effect does contractionary monetary policy have on economic growth?

What effect does contractionary monetary policy have on economic growth?
It slows down
It speeds up
No effect
8/10

When the central bank sells government bonds, what happens to the money supply?

When the central bank sells government bonds, what happens to the money supply?
It increases
It decreases
No effect
9/10

What is the name of the policy used by central banks to control inflation by targeting a specific inflation rate?

What is the name of the policy used by central banks to control inflation by targeting a specific inflation rate?
Inflation targeting
Price fixing
Quantitative easing
10/10

Which of the following is a fiscal policy tool?

Which of the following is a fiscal policy tool?
Open Market Operations
Government spending
Reserve requirements