1. Which of the following is NOT a function of monetary policy?
A) Controlling inflation
B) Regulating money supply
C) Managing government spending
D) Stabilizing exchange rates
2. What happens when the central bank increases the Cash Reserve Ratio (CRR)?
A) Banks have more money to lend
B) Money supply increases
C) Inflation rises
D) Banks have less money to lend
3. Fiscal policy primarily focuses on which two key areas?
A) Money supply and inflation
B) Government spending and taxation
C) Interest rates and exchange rates
D) Unemployment and banking regulations
4. When a government runs a fiscal deficit, it means that:
A) Its revenue is higher than expenditure
B) Its expenditure is higher than revenue
C) The central bank prints more money
D) It has a trade surplus
5. Which monetary policy tool is used by central banks to influence short-term interest rates?
A) Government bonds
B) Open market operations
C) Tax rebates
D) Public borrowing
A) Controlling inflation
B) Regulating money supply
C) Managing government spending
D) Stabilizing exchange rates
2. What happens when the central bank increases the Cash Reserve Ratio (CRR)?
A) Banks have more money to lend
B) Money supply increases
C) Inflation rises
D) Banks have less money to lend
3. Fiscal policy primarily focuses on which two key areas?
A) Money supply and inflation
B) Government spending and taxation
C) Interest rates and exchange rates
D) Unemployment and banking regulations
4. When a government runs a fiscal deficit, it means that:
A) Its revenue is higher than expenditure
B) Its expenditure is higher than revenue
C) The central bank prints more money
D) It has a trade surplus
5. Which monetary policy tool is used by central banks to influence short-term interest rates?
A) Government bonds
B) Open market operations
C) Tax rebates
D) Public borrowing
