This quiz works best with JavaScript enabled. Home > Monetary > Policy > Monetary Policy – Quiz 12 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Monetary Policy Quiz 12 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is NOT one of the tools of monetary policy? A) Open Market Operations. B) Discount Rate. C) Reserve Requirement. D) Government Spending. Show Answer Correct Answer: D) Government Spending. 2. Money that has an alternative use as an economic good is A) Commodity money. B) Specie. C) Fiat money. D) Wampum. Show Answer Correct Answer: A) Commodity money. 3. This year, when Bonnie arrives at the country store mentioned in the previous question, she discovers that the pies cost $ 1 more than they did the previous year. Bonnie is noticing what? A) Price ceiling. B) Price floor. C) Inflation. D) Stagflation. Show Answer Correct Answer: C) Inflation. 4. The purpose of the Fed's discount window is to: A) Provide short-term loans to banks that need money. B) Set monetary policy. C) Provide low-interest loans to banks. D) Handle transactions related to the buying and selling of securities. Show Answer Correct Answer: A) Provide short-term loans to banks that need money. 5. This tool of monetary policy refers to the buying and selling of government bonds. A) Discount rate. B) Reserve requirement. C) Open market operations. D) None of above. Show Answer Correct Answer: C) Open market operations. 6. The Fed uses interest rates to try and influence: A) Unemployment rate & inflation. B) Housing market & food prices. C) Student loan debt & national deficit. D) Inflation & fiscal policy. Show Answer Correct Answer: A) Unemployment rate & inflation. 7. It involves publicly announcing an inflation forecast which the BSP promises to achieve. A) Monetary policy. B) Inflation Target. C) Price Stability. D) Financial Stability. Show Answer Correct Answer: B) Inflation Target. 8. If Central Bank raised the required reserve ratio, it would A) Limit money supply. B) Increase money supply. C) Money supply remain unchanged. D) None of above. Show Answer Correct Answer: A) Limit money supply. 9. Which of the following is not a Monetary Policy tool? A) OMO. B) Reserve Requirements. C) Discount Rate. D) Balance Accounts. Show Answer Correct Answer: D) Balance Accounts. 10. During a recession central bank will use A) Supply side policy. B) Contractionary monetary policy. C) Expansionary monetary policy. D) None of above. Show Answer Correct Answer: C) Expansionary monetary policy. 11. Who is the Chairperson of the Board of Govenors for the Federal Reserve? A) Janet Yellin. B) Steve Mnuchin. C) Jerome Powell. D) Milton Friedman. Show Answer Correct Answer: C) Jerome Powell. 12. Expansionary Monetary Policy could be A) Increase DR. B) Increase RR. C) Decrease DR. D) Increase RR. Show Answer Correct Answer: C) Decrease DR. 13. Which of the following words is not used in Monetary Policy? A) Cash reserve ratio. B) Repo Rate. C) Bank rate. D) Blue chip. Show Answer Correct Answer: D) Blue chip. 14. Liabilities are A) Reserves a bank must set aside. B) Debts and obligations. C) The same as net worth. D) None of above. Show Answer Correct Answer: B) Debts and obligations. 15. The quantity of reserves supplied equals A) Nonborrowed reserves minus borrowed reserves. B) Nonborrowed reserves plus borrowed reserves. C) Required reserves plus borrowed reserves. D) Total reserves minus required reserves. Show Answer Correct Answer: B) Nonborrowed reserves plus borrowed reserves. 16. What controls the supply of money & interest rates according to the needs of the economy? A) Monetary Policy. B) FED. C) FOMC. D) Open Market Operations. Show Answer Correct Answer: A) Monetary Policy. 17. Which of the following policies might be used to control inflation? A) Increase government spending. B) Increase interest rates. C) Increase the money supply. D) Decrease direct taxation. Show Answer Correct Answer: B) Increase interest rates. 18. RBI has launched a portal to curb illegal money pooling by firms called ..... A) Sanchet.rbi.org.in. B) Sachet.rbi.org.in. C) Sanket.rbi.org.in. D) None of the above. Show Answer Correct Answer: B) Sachet.rbi.org.in. 19. What happens to the money circulation, when the FED orders a tight money policy? A) More money is put out into circulation. B) Less money is put into circulation. C) Circulation stays the same. D) Interest rates rise. Show Answer Correct Answer: B) Less money is put into circulation. 20. Milton Friedman, idea that states changes in the money supply are the main cause of inflation and of economic expansions or contractions A) Classical Economics. B) Monetarism. C) Keynesian economics. D) Communism. Show Answer Correct Answer: B) Monetarism. ← PreviousNext →Related QuizzesMonetary QuizzesMonetary Policy Quiz 1Monetary Policy Quiz 2Monetary Policy Quiz 3Monetary Policy Quiz 4Monetary Policy Quiz 5Monetary Policy Quiz 6Monetary Policy Quiz 7Monetary Policy Quiz 8Monetary Policy Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books