Macroeconomics - Chapter V (Fiscal and Monetary Policy)

Actions which are designed to influence the economic activities by controlling aggregate demand and money supply in the economy is known as __________.

• Economic policy

• Monetary policy

• Fiscal policy

• Socio-economic policy

Which of the following is not an objective of economic policy?

• Economic growth

• Full employment

• Price stability

• Political instability

Fiscal policy is the policy of __________.

• Central bank

• Government

• Commercial bank

• All of these

Which is not a tool of fiscal policy?

• Government expenditure

• Government borrowing

• Bank rate

• Tax

Expansionary policies are designed to control __________.

• Inflation

• Deflation

• Inflation and deflation

• All of these

Recommend the fiscal tool to control deflation.

• Increase the rate of interest

• Decrease the rate of interest

• Increase the tax

• Decrease the tax

Monetary policy control inflation and deflation by controlling ___________.

• Aggregate demand

• Aggregate supply

• Money supply

• Tax

Identify the contractionary monetary tool of the central bank to control inflation.

• Decrease the bank rate

• Decrease the rate of interest

• Decrease the reserve requirements

• Selling of government securities in the open market

The government sources of revenue and plans of expenditure for an year is known as __________.

• Revenue plan

• Expenditure plan

• Budget

• Fiscal policy

If the government spending is more than its revenue, it is called as ___________.

• Budget

• Surplus budget

• Deficit budget

• Loss