Monetary Policy Quiz 15 (20 MCQs)

Quiz Instructions

Select an option to see the correct answer instantly.

1. Monetary policy resulting in lower interest rates and greater access to credit; associated with an expansion of the money supply.

Correct Answer: C) Easy money policy.

2. What do we call the rate at which the Reserve Bank of India lends money to commercial banks?

Correct Answer: A) Repo Rate.

3. What is the monitoring/ budgeting of revenues and expenditures of the country's accounts?

Correct Answer: A) Fiscal Policy.

4. What action would the Bank of England take to control inflation?

Correct Answer: D) Increase/decrease the bank base rate.

5. A significant rise in interest rates is most likely to lead to an increase in:

Correct Answer: C) Unemployment.

6. When was R.B.I. nationalised?

Correct Answer: B) 1949.

7. Decisions the RBA makes about money & banking is called

Correct Answer: D) Monetary policy.

8. If the Fed wanted to expand or ease monetary policy, which might they do?

Correct Answer: C) Decrease the interest rate.

9. What is the Bank of England base rate today

Correct Answer: D) 0.1%.

10. Which is the Fed most likely to do in the event of a recession?

Correct Answer: A) Buy treasury bonds on the open market.

11. ..... interest rates refer to government bonds maturing in ten years

Correct Answer: C) Long-term.

12. Board of Governors members are appointed by the ..... and serve a ..... term

Correct Answer: D) U.S. president / 14 year.

13. Ideally, the Fed's target for inflation is:

Correct Answer: A) 2%.

14. Monetary Policy provies stability to our ..... ?

Correct Answer: C) Exchange rate.

15. Which of the following is a monetary policy measure?

Correct Answer: C) An increase in the rate of interest.

16. A policy to create money and reduce yields on government and corporate bonds

Correct Answer: A) Quantitative easing.

17. What may be a disadvantage of a high rate of economic growth for a government?

Correct Answer: C) Increasing risk of inflation.

18. Which is not an example of shocks outside the control of the Central Bank

Correct Answer: A) Monetary Policy.

19. The primary concern with using an Easy Money Policy, or increasing the money supply too quickly or by too much, is:

Correct Answer: A) Inflation.

20. The decisions about FISCAL policy in the United States are made by

Correct Answer: C) Congress and the President.