In most countries, who usually sets the base interest rate (the economy's benchmark interest rate)?
Monetary Policy

Quiz
•
Social Studies
•
12th Grade
•
Medium
Christopher Warren
Used 12+ times
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25 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
The Central Bank
Commercial Banks
Savers and borrowers
Savers and lenders
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following is not a function of a central bank?
The sole issuer of money in the economy
Oversees government spending and taxation revenues
Lender of last resort
Manages the implementation of monetary policy
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which statement below is correct?
Higher interest rates create incentives for firms to invest
Higher demand for money tends to cause lower interest rates
Lower interest rates create incentives for firms to invest
Higher supply of money tends to cause higher interest rates
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
When the money supply rises , interest rates _______. When contractionary monetary policy is used, interest rates_______
Rise, fall
Fall, rise
Rise, rise
Fall, fall
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following does not directly influence the level of money supply in the economy?
Unemployment
Inflation
Nominal interest rates
Real growth rates
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following is not directly affected by higher interest rates?
Taxation
Investment
Consumption
Net Exports
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following is an example of expansionary monetary policy?
Government expenditure increasing during a recession as more people claim unemployment benefits
Government expenditure increases in response to falling AD in the economy
Marginal tax rates are reduced
Money supply is increased
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