This quiz works best with JavaScript enabled. Home > Economics > Monetary Economics > Monetary Economics – Quiz 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Monetary Economics Quiz 4 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Nominal interest rates are different from real interest rates because: A) Real interest rates are the current bank lending rates. B) Real interest rates take into account inflation. C) Real interest rates take into account changes in house prices. D) Nominal rates are rates which only apply to borrowers and not lenders. Show Answer Correct Answer: B) Real interest rates take into account inflation. 2. What action would Bank Indonesia take to control inflation? (ingin mengurangi JUB) A) Decrease the required reserve ratio. B) Buy SBI. C) Increase taxes. D) Increase the discount rate. Show Answer Correct Answer: D) Increase the discount rate. 3. Money must be scarce. A) Limited Supply. B) Medium of Exchange. C) Store of Value. D) Fiat Money. Show Answer Correct Answer: A) Limited Supply. 4. The symbol of currency was designed by A) Mahatma Gandhi. B) Dr.Ambedkar. C) D. Udaya Kumar. D) None of above. Show Answer Correct Answer: C) D. Udaya Kumar. 5. Which is an example of a progressive tax? A) Sin tax. B) Sales tax. C) Income tax. D) Social security. Show Answer Correct Answer: C) Income tax. 6. The average number of times that a dollar is spent in buying the total amount of final goods andservices produced during a given time period is known as A) Gross national product. B) The spending multiplier. C) The money multiplier. D) Velocity. Show Answer Correct Answer: D) Velocity. 7. When the federal government uses its spending and revenue to influence the economy A) Fiscal Policy. B) Monetary Policy. C) Keynesian Policy. D) Supply Side Policy. Show Answer Correct Answer: A) Fiscal Policy. 8. In India, coins are issued by A) RBI. B) CBI. C) State government. D) Ministry of finance. Show Answer Correct Answer: D) Ministry of finance. 9. In what way the Central Bank serves as a Banker's Bank? A) By maintaining gold reserve. B) By controlling currency. C) By acting as a lender of the last resort. D) By reducing the interest rates. Show Answer Correct Answer: C) By acting as a lender of the last resort. 10. Paper currency system us managed by the A) Central Monetary authority. B) State Government. C) Central Government. D) Banks. Show Answer Correct Answer: A) Central Monetary authority. 11. Derivative deposit in a commercial bank is also called A) Active deposit. B) Passive deposit. C) Primary deposit. D) None of the above. Show Answer Correct Answer: A) Active deposit. 12. Primary deposit in a commercial bank is called A) Active deposit. B) Passive deposit. C) Derivative deposit. D) All of the above. Show Answer Correct Answer: B) Passive deposit. 13. NABARD stands for A) National Bank for Agriculture and Research Developmen. B) National Bank for Analysis of Rural Development. C) National Bank for Agriculture and Rural Development. D) National Bank for Asian Development. Show Answer Correct Answer: C) National Bank for Agriculture and Rural Development. 14. India's first 'talking' ATM was launched by A) ICICI Bank. B) United Bank of India. C) Citi Bank. D) Union Bank of India. Show Answer Correct Answer: D) Union Bank of India. 15. Liquid form of assets A) Bills of payment. B) Money. C) Gold. D) Silver. Show Answer Correct Answer: B) Money. 16. A bank's reserve ratio is 10 percent and the bank has $ 2, 000 in deposits. Its reserves amount to A) $ 20. B) $ 200. C) $ 400. D) $ 1, 800. Show Answer Correct Answer: B) $ 200. 17. Unemployment is at an all-time high. The Fed should A) Increase interest on reserves. B) Decrease the reserve requirement. C) Sell bonds. D) None of above. Show Answer Correct Answer: B) Decrease the reserve requirement. 18. Why do we call a dollar a 'buck'? A) George Washington's nickname was Buck. B) In the frontier days, the pelt of a male deer was worth a dollar. C) Buck was the artist that drew the design on the first paper money. D) The first dollar was made from the skin of a male deer. Show Answer Correct Answer: B) In the frontier days, the pelt of a male deer was worth a dollar. 19. A bank's capacity to create credit is limited by the A) Size of cash. B) Size of its area. C) Size of the central bank. D) All of the above. Show Answer Correct Answer: B) Size of its area. 20. What tool does the Federal Reserve use most often to regulate the money supply? A) Discount rate. B) Open Market Operations. C) Money Creation. D) Budget Amendments. Show Answer Correct Answer: B) Open Market Operations. ← PreviousNext →Related QuizzesEconomics QuizzesMonetary Economics Quiz 1Monetary Economics Quiz 2Monetary Economics Quiz 3Monetary Economics Quiz 5 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books