This quiz works best with JavaScript enabled. Home > Monetary > Policy > Monetary Policy – Quiz 14 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Monetary Policy Quiz 14 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Are determined by interaction of supply and demand A) Price. B) Price stability. C) Rate. D) Inflation. Show Answer Correct Answer: A) Price. 2. What happened with a price increase? A) Deflation. B) Inflation. C) Loose money. D) Tight money. Show Answer Correct Answer: B) Inflation. 3. Through open market operations, the RBI buys and sells government securities to influence the supply of bank reserves. When the RBI wants to increase reserves, it does what? A) A) Buys Securities. B) B) Sells Securities. C) Unattempted. D) None of above. Show Answer Correct Answer: A) A) Buys Securities. 4. Federal Reserve Board of Governors members are appointed by the ..... and confirmed by the ..... A) Treasury; Congress. B) House of Rep. C) President; Senate. D) FED. Show Answer Correct Answer: C) President; Senate. 5. Fiat money is (hint:it's the name of the $ $ $ used in the U.S.) A) Money is checking accounts. B) Money that has intrinsic value on its own. C) Specially created from the Federal Reserve. D) Money that is only valuable because the government says it is. Show Answer Correct Answer: D) Money that is only valuable because the government says it is. 6. Who puts US paper currency into circulation? A) The Fed. B) The Treasury Department. C) The US Mint. D) The House of Representatives. Show Answer Correct Answer: A) The Fed. 7. The Federal Reserve Act says that no more than one of the members of the Board of Governors may be selected from the same ..... A) University. B) Government agency. C) Federal Reserve District. D) Federal Reserve Bank. Show Answer Correct Answer: C) Federal Reserve District. 8. OMO means A) Open Market Operations. B) Open Market Oxymoron. C) Odd Man Out. D) Odd Money Operations. Show Answer Correct Answer: A) Open Market Operations. 9. Financial Policy Committee (FPC):Which is untrue? A) FPC hasn't power to alter loan-to-value ratios. B) FPC is charged with safeguarding financial stability. C) The FPC can change the cash reserve requirements for Banks. D) FPC has the power to alter loan-to-value ratios. Show Answer Correct Answer: A) FPC hasn't power to alter loan-to-value ratios. 10. All of the following are responsibilities of the Federal Reserve EXCEPT A) Print Money. B) Control the Money Supply. C) Regulate banks. D) None of above. Show Answer Correct Answer: A) Print Money. 11. What would a government reduce as part of an expansionary monetary policy to increase employment? A) Government spending. B) The money supply. C) The rate of interest. D) Unemployment benefit. Show Answer Correct Answer: C) The rate of interest. 12. Which is not a component of monetary Policy A) I'm insulted by this question. B) Money supply. C) Exchange rates. D) Interest rates. Show Answer Correct Answer: A) I'm insulted by this question. 13. The interest rate the Federal Reserve charges on loans it makes to member banks A) Discount rate. B) Open market operations. C) Federal funds rate. D) Reserve requirement. Show Answer Correct Answer: A) Discount rate. 14. What consumer behavior is the Federal Reserve board trying to encourage when it implements a loose monetary policy? A) Increased saving and reduced spending. B) Decreased saving and increased spending. C) Increased saving and spending. D) Decreased saving and spending. Show Answer Correct Answer: B) Decreased saving and increased spending. 15. 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. 16. How long does the accounting year of the Reserve Bank of India come from? A) 1st July to 1st June. B) 1st April to 30th March. C) 1st July to 30th June. D) January 1 to December 31. Show Answer Correct Answer: C) 1st July to 30th June. 17. Expansionary Money Supply can have the side effect of A) Raising iinterst rates. B) Causing inflation. C) Causing stagflation. D) Raising unemployment. Show Answer Correct Answer: B) Causing inflation. 18. 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. 19. 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. 20. An overall rise in the cost of goods and services A) Inflation. B) Discount rate. C) Interest. D) Monetary policy. Show Answer Correct Answer: A) Inflation. ← 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