This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Monetary And Fiscal Policy > Monetary And Fiscal Policy – Quiz 15 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Monetary And Fiscal Policy Quiz 15 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. If the Fed purchases government securities, what will happen to the economy? A) Increase money supply. B) Decrease money supply. Show Answer Correct Answer: A) Increase money supply. 2. Buying or selling of government securities (bonds). Buying increases money supply, selling decreases money supply A) Discount Rate. B) Reserve Requirement. C) Open Market Operations. D) Inflation. Show Answer Correct Answer: C) Open Market Operations. 3. How are fiscal and monetary policy goals similar? A) They both use the same economic tools to fix economic problems. B) They both try to promote economic growth and stability. C) They always require Congressional approval before passing. D) They both are decided by a Board of Governors. Show Answer Correct Answer: B) They both try to promote economic growth and stability. 4. Real Bank Rate in the UK at present is A) Negative. B) Positive. C) Zero. D) High. Show Answer Correct Answer: A) Negative. 5. What is the number of televisions produced in Malaysia? A) Microeconomics. B) Macroeconomics. Show Answer Correct Answer: A) Microeconomics. 6. Use the scenario to answer the following question. Alberto is a carpenter and he needs a new saw in order to make more cabinets to sell to his buyers. To do this, he sells a bench he has made, and uses the money to purchase a new saw. What can one conclude about the function of money in this scenario? A) Alberto is using money as a store of value. B) Alberto is using money as a unit of account. C) Alberto is using money as a medium of exchange. D) Alberto is using money as a means of deferring payment. Show Answer Correct Answer: C) Alberto is using money as a medium of exchange. 7. Which of the following has the longest maturity period? A) Treasury Note. B) Treasury Bond. C) Treasury Note. D) They are all the same. Show Answer Correct Answer: B) Treasury Bond. 8. The school of economic thought that says that free markets will self-correct and do not need government intervention is ..... A) Keynesian economics. B) Monetarism. C) Classical economics. D) Economics for the people. Show Answer Correct Answer: C) Classical economics. 9. The interest rate the FED charges banks A) Commercial interest rate. B) Prime rate. C) Discount rate. D) Federal funds rate. Show Answer Correct Answer: C) Discount rate. 10. The Federal Open Market Committee can buy and sell government securities/bonds. Which of the following tools of monetary policy does this describe? A) Discount rate. B) Reserve requirement. C) Open market operations. D) Interest on excess reserves. Show Answer Correct Answer: C) Open market operations. 11. If credit and borrowing are expanding, which of the following is false A) Want to decrease the money supply. B) Decrease government spending. C) Decrease taxes. D) Sell bonds. Show Answer Correct Answer: C) Decrease taxes. 12. To increase money supply the Federal Reserve will A) Sell bonds to banks. B) Buy bonds from banks. C) Sell bonds to the government. D) None of above. Show Answer Correct Answer: B) Buy bonds from banks. 13. If the marginal propensity to consume MPC is 0.75, the value of the multiplier is A) 4. B) 7.5. C) 5. D) 0.75. Show Answer Correct Answer: A) 4. 14. Which of the following people were proponents of Supply-side economics A) FDR. B) JFK. C) Ronald Reagan. D) Herbert Hoover. Show Answer Correct Answer: C) Ronald Reagan. 15. Raising the discount rate will reduce A) Unemployment. B) Inflation. Show Answer Correct Answer: B) Inflation. 16. Monetary Policy is implemented by A) The Federal Budget. B) Central Bank. C) Congress and the President. D) Taxing and govt. spending. Show Answer Correct Answer: B) Central Bank. 17. When was the Federal Reserve System created? A) 1930. B) 1920. C) 1900. D) 1913. Show Answer Correct Answer: D) 1913. 18. The total unemployment in entire Malaysian economy rises. A) Microeconomics. B) Macroeconomics. Show Answer Correct Answer: B) Macroeconomics. 19. The Fed wants to fight inflation. What action should they take regarding the discount rate, the Reserve Requirement, or government securities? A) Adopt tight monetary policy & raise the rates. B) Adopt easy monetary policy & lower the rates. C) Adopt Contractionary fiscal policy & decrease spending. D) Adopt Expansionary fiscal policy & decrease taxes. Show Answer Correct Answer: A) Adopt tight monetary policy & raise the rates. 20. When the Fed buys securities, what effect does this have on GDP? A) Easy Monetary Policy, Increase. B) Easy Monetary Policy, Decrease. C) Tight Monetary Policy, Increase. D) Tight Monetary policy, Decrease. Show Answer Correct Answer: A) Easy Monetary Policy, Increase. ← PreviousNext →Related QuizzesMacroeconomics QuizzesEconomics QuizzesMonetary And Fiscal Policy Quiz 1Monetary And Fiscal Policy Quiz 2Monetary And Fiscal Policy Quiz 3Monetary And Fiscal Policy Quiz 4Monetary And Fiscal Policy Quiz 5Monetary And Fiscal Policy Quiz 6Monetary And Fiscal Policy Quiz 7Monetary And Fiscal Policy Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books