This quiz works best with JavaScript enabled. Home > Economics > Monetary > Policy > Monetary Policy – Quiz 10 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Monetary Policy Quiz 10 (27 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. There are how many district banks in the Federal Reserve System? A) 7. B) 14. C) 12. D) None of above. Show Answer Correct Answer: C) 12. 2. How long does the accounting year of the Reserve Bank of India come from? A) January 1 to December 31. B) 1st April to 30th March. C) 1st July to 30th June. D) 1st July to 1st June. Show Answer Correct Answer: C) 1st July to 30th June. 3. Expansionary Money Supply can have the side effect of A) Raising unemployment. B) Causing inflation. C) Causing stagflation. D) Raising iinterst rates. Show Answer Correct Answer: B) Causing inflation. 4. Which one is not part of the Federal Reserve's dual mandate? A) Control of the money supply. B) Maximum employment. C) Price stability. D) None of above. Show Answer Correct Answer: A) Control of the money supply. 5. M1 is also called ..... A) Transactional funds. B) Federal funds. C) Certificate of deposits. D) None of above. Show Answer Correct Answer: A) Transactional funds. 6. An overall rise in the cost of goods and services A) Interest. B) Discount rate. C) Monetary policy. D) Inflation. Show Answer Correct Answer: D) Inflation. 7. Monetary policy resulting in lower interest rates and greater access to credit; associated with an expansion of the money supply. A) Easy money policy. B) Tight money policy. C) Excess reserve policy. D) Open market policy. Show Answer Correct Answer: A) Easy money policy. 8. What do we call the rate at which the Reserve Bank of India lends money to commercial banks? A) SLR. B) Reverse Repo Rate. C) Repo Rate. D) CRR. Show Answer Correct Answer: C) Repo Rate. 9. What is the monitoring/ budgeting of revenues and expenditures of the country's accounts? A) Monetary Policy. B) Money Supply. C) FED. D) Fiscal Policy. Show Answer Correct Answer: D) Fiscal Policy. 10. What action would the Bank of England take to control inflation? A) Increase taxes. B) Increase/decrease the bank base rate. C) Decrease the required reserve ratio. D) Buy government securities. Show Answer Correct Answer: B) Increase/decrease the bank base rate. 11. A significant rise in interest rates is most likely to lead to an increase in: A) Short run aggregate supply. B) Consumer spending. C) Unemployment. D) Investment spending. Show Answer Correct Answer: C) Unemployment. 12. When was R.B.I. nationalised? A) 1929. B) 1914. C) 1949. D) 1935. Show Answer Correct Answer: C) 1949. 13. Decisions the RBA makes about money & banking is called A) Monetary policy. B) Discount rate. C) Budget deficit. D) Open market operations. Show Answer Correct Answer: A) Monetary policy. 14. If the Fed wanted to expand or ease monetary policy, which might they do? A) Decrease the interest rate. B) Increase reserves, limiting what banks can loan. C) Increase the interest rate. D) Lower taxes. Show Answer Correct Answer: A) Decrease the interest rate. 15. What is the Bank of England base rate today A) 0.75%. B) 0.25%. C) 0.1%. D) 0.5%. Show Answer Correct Answer: C) 0.1%. 16. Which is the Fed most likely to do in the event of a recession? A) Buy treasury bonds on the open market. B) Raise interest on reserves. C) Sell treasury bonds on the open market. D) Raise the discount rate. Show Answer Correct Answer: A) Buy treasury bonds on the open market. 17. ..... interest rates refer to government bonds maturing in ten years A) Short-term. B) Medium-term. C) Long-term. D) None of above. Show Answer Correct Answer: C) Long-term. 18. Board of Governors members are appointed by the ..... and serve a ..... term A) Reserve Bank presidents / 14 year. B) U.S. president / 4 year. C) Fed Chair / 4 year. D) U.S. president / 14 year. Show Answer Correct Answer: D) U.S. president / 14 year. 19. Ideally, the Fed's target for inflation is: A) 0%. B) 5%. C) 10%. D) 2%. Show Answer Correct Answer: D) 2%. 20. Monetary Policy provies stability to our ..... ? A) FED. B) Government. C) Exchange rate. D) Banks. Show Answer Correct Answer: C) Exchange rate. 21. Which of the following is a monetary policy measure? A) A decrease in government spending on education. B) An increase in sales tax. C) A decrease in government regulations on labour markets. D) An increase in the rate of interest. Show Answer Correct Answer: D) An increase in the rate of interest. 22. A policy to create money and reduce yields on government and corporate bonds A) Quantitative easing. B) Helicopter money. C) Expansionary fiscal policy. D) None of above. Show Answer Correct Answer: A) Quantitative easing. 23. What may be a disadvantage of a high rate of economic growth for a government? A) Increasing tax revenues. B) Increasing risk of inflation. C) Increasing wages. D) Increasing rate of employment. Show Answer Correct Answer: B) Increasing risk of inflation. 24. Which is not an example of shocks outside the control of the Central Bank A) Monetary Policy. B) Changes in bank capital requirements. C) Changes in the global economy and changes in commodity price. D) In fiscal policy. Show Answer Correct Answer: A) Monetary Policy. 25. The primary concern with using an Easy Money Policy, or increasing the money supply too quickly or by too much, is: A) Lower GDP. B) Recession. C) Inflation. D) Unemployment. Show Answer Correct Answer: C) Inflation. 26. The decisions about FISCAL policy in the United States are made by A) The Federal Reserve Board of Governors. B) Major wall street banks. C) Congress and the President. D) All the above. Show Answer Correct Answer: C) Congress and the President. 27. Excessive lending in subprime debt crisis of 2008 led to A) Banks having to write off bad debt. B) Banks having their debt taken on by the government. C) Renationalising all banks. D) The enrire collapse of the financial markets. Show Answer Correct Answer: A) Banks having to write off bad debt. ← PreviousRelated QuizzesMonetary QuizzesEconomics QuizzesMonetary Policy Quiz 1Monetary Policy Quiz 2Monetary Policy Quiz 3Monetary Policy Quiz 4Monetary Policy Quiz 5Monetary Policy Quiz 6Monetary Policy Quiz 7Monetary Policy Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books