Monetary policy MCQs | Definition | Fiscal policy

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Monetary Policy Using a variety of techniques to influence the use of money and credit within an economy in order to meet certain objectives.
Monetary policy MCQs

Economics Monetary Policy MCQs

Monetary Policy Using a variety of techniques to influence the use of money and credit within an economy in order to meet certain objectives. Here on MCQs.club we have prepared Multiple Choice Questions (MCQs) on economics monetary policy that fully cover the monetary policy definition, monetary policy definition economics, contractionary fiscal policy examples. Our these MCQs on modern monetary policy and fiscal policy are useful for Professional exams, Competitive exams, Business management exams.

  1. Which of the following is correct for “Interest Rate”?
    1. Interest rate is the amount charged by a lender to a borrower on the principal borrowed.
    2. Interest rates are expressed as a percentage of principal.
    3. It is typically recorded on per annum basis.
    4. All of the above
  1. Types of interest rates include:
    1. Nominal
    2. Real
    3. Both A&B
    4. None
  1. Nominal interest rate –
    1. It is the simplest interest rate. It is the stated coupon rate or the stated interest rate.
    2. It is inflation adjusted. It is so named because it states the real rate that the lender would receive after it has been adjusted for the inflation.
    3. Both A&B
    4. None
  1. Real interest rate –
    1. It is the simplest interest rate. It is the stated coupon rate or the stated interest rate.
    2. It is inflation adjusted.
    3. It is so named because it states the real rate that the lender would receive after it has been adjusted for the inflation.
    4. Both B&C only
  1. Identify which of the following is correct for Determination of interest rate?
    1. An increase in demand would lead to an increase in the rate of interest whereas a decrease in demand would lead to a decrease in the rate of interest.
    2. With the rise in actual or expected inflation rate, a rise in the interest rate too takes place.
    3. The government has a say in the determination of the interest rates by way of devising the monetary policy.
    4. All of the above
  1. The interest rate on different type of loans depends on multiple factors including:
    1. Credit risk
    2. Time
    3. Tax considerations
    4. All of the above
  1. Monetary union (or currency union) –
    1. Where two or more states share the same currency. They operate under the same central bank.
    2. The entity responsible for overseeing the overall monetary policy in a country.
    3. It is concerned with meeting a number of objectives such as: currency stability, low inflation and full employment.
    4. All of the above
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