This quiz works best with JavaScript enabled. Home > Monetary > Policy > Monetary Policy – Quiz 7 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Monetary Policy Quiz 7 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Who is the chairperson of the Monetary Policy committee of India? A) Finance Minister. B) Prime Minister. C) RBI Governor. D) Chief Economic Advisor. Show Answer Correct Answer: C) RBI Governor. 2. Economic recessions sometimes occurred in the past due to: A) Unregulated business control of the economy. B) The lack of social safety nets. C) The domino effect of bank failures. D) None of above. Show Answer Correct Answer: C) The domino effect of bank failures. 3. Open market sales shrink ..... thereby lowering ..... A) The money multiplier; the money supply. B) The money multiplier; reserves and the monetary base. C) Reserves and the monetary base; the money supply. D) The money base; the money multiplier. Show Answer Correct Answer: C) Reserves and the monetary base; the money supply. 4. Which option is not an example of monetary policy? A) Capital investment in research and development. B) Interest rate policy. C) The money supply. D) Bank credit control. Show Answer Correct Answer: A) Capital investment in research and development. 5. Which law was passed in 1913 to stabilize the economy and provide emergency cash to banks? A) The Federal Reserve Act. B) The Works Progress Administration. C) The Truth in Lending Act. D) The Federal Employers' Liability Act. Show Answer Correct Answer: A) The Federal Reserve Act. 6. The economy is experiencing high unemployment and a low rate of economic growth and the fed decides to pursue an easy money policy by A) Buying government securities. B) Selling government securities. C) Raising the reserve ratio. D) Raising the discount rate. Show Answer Correct Answer: A) Buying government securities. 7. As the level of interest rates in the economy falls, the demand for money, ceteris paribus: A) Increase. B) Will roughly fall in line with the change in interest rates. C) Will remain unchanged. D) Could move in either direction depending on other factors. Show Answer Correct Answer: A) Increase. 8. How does the Federal Reserve slow inflation and economic growth? A) Buying securities. B) Stimulating economic growth. C) Lowering interest rates. D) Raising interest rates. Show Answer Correct Answer: D) Raising interest rates. 9. If financial institutions cannot borrow from each other, they may need to borrow from the Federal Reserve. The interest rate charged by the Fed for these loans is called the: A) Discount Rate. B) Inflation. C) Reserve Requirement. D) None of above. Show Answer Correct Answer: A) Discount Rate. 10. The nearest Fedral Reseve District bank to Portland Texas is? A) New York. B) Atlanta. C) Dallas. D) None of above. Show Answer Correct Answer: C) Dallas. 11. It is M1 + small time deposits A) M1. B) M2. C) M3. D) None of above. Show Answer Correct Answer: B) M2. 12. This is a system requiring financial institutions to set aside a fraction of their deposits in the form of reserves or vault cash. A) Fractional reserve system. B) Legal reserves. C) Reserve requirement. D) Member bank reserves. Show Answer Correct Answer: A) Fractional reserve system. 13. *Raising the Discount Rate*Raising the Reserve Requirement*Selling securities on the open market*Raising the Interest Rate on Required and Excess ReservesAll of these are examples of actions that A) Increase. B) Decrease. C) Keep it he same. D) Limit it. Show Answer Correct Answer: B) Decrease. 14. What is the USA currency's money value source based on? A) FED. B) FOMC. C) Fiat Money. D) Monetary Policy. Show Answer Correct Answer: A) FED. 15. Which of the following option is NOT an example of monetary policy? A) Capital investment in research development. B) Interest rate policy. C) The money supply. D) Bank credit control. Show Answer Correct Answer: A) Capital investment in research development. 16. Something that must be accepted as payment for a debt is called A) Counterfeit. B) Bootleg. C) Legal Tender. D) None of above. Show Answer Correct Answer: C) Legal Tender. 17. Best or lowest interest rate commercial banks charge their customers. A) Discount rate. B) Prime rate. C) Wage rate. D) Quantity rate. Show Answer Correct Answer: B) Prime rate. 18. The Monetary Equation of Exchange is A) C+IG+G+Xn. B) R = n-Inf. C) MV=PQ. D) N = r + Infl. Show Answer Correct Answer: C) MV=PQ. 19. When the supply for money increases and the demand for money reduces, there will be ..... A) A fall in the level of prices. B) A decrease in the rate of interest. C) An increase in the rate of interest. D) A fall in the level of demand. Show Answer Correct Answer: B) A decrease in the rate of interest. 20. An Expansionary Monetary Policy is often called an: A) Easy Money Policy. B) Making it rain. C) Fat paycheck. D) Oh no. Show Answer Correct Answer: A) Easy Money Policy. ← PreviousNext →Related QuizzesMonetary QuizzesMonetary Policy Quiz 1Monetary Policy Quiz 2Monetary Policy Quiz 3Monetary Policy Quiz 4Monetary Policy Quiz 5Monetary Policy Quiz 6Monetary Policy Quiz 8Monetary Policy Quiz 9Monetary Policy Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books