Monetary Policy Quiz Test your knowledge about monetary policy and its impact on the economy. michelle published on September 24, 20230 responses 0 « Previous Next » Questions in vertical order 1/10 What is the main aim of monetary policy? Stabilizing employment Controlling inflation Promoting economic growth 2/10 Which organization is responsible for monetary policy in the United States? Federal Reserve World Bank International Monetary Fund 3/10 What tool does the central bank use to influence interest rates? Fiscal policy Open market operations Monopolistic competition 4/10 When the central bank decreases the money supply, what is the likely effect on interest rates? They decrease They increase They remain unchanged 5/10 What is the term used for the interest rate at which commercial banks borrow from the central bank? Prime rate Federal funds rate Discount rate 6/10 Which of the following is an expansionary monetary policy? Decreasing government spending Increasing reserve requirements Lowering interest rates 7/10 What effect does contractionary monetary policy have on economic growth? It slows down It speeds up No effect 8/10 When the central bank sells government bonds, what happens to the money supply? It increases It decreases No effect 9/10 What is the name of the policy used by central banks to control inflation by targeting a specific inflation rate? Inflation targeting Price fixing Quantitative easing 10/10 Which of the following is a fiscal policy tool? Open Market Operations Government spending Reserve requirements
