IGCSE Economics Quiz on Monetary Policy

What is the main monetary policy measure currently used in most countries?

• Changes in trade tariffs

• Changes in taxation

• Changes in government spending

• Changes in the rate of interest

How does a rise in the rate of interest affect consumer expenditure?

• It has no effect on consumer expenditure

• It only affects investment

• It reduces consumer expenditure

• It increases consumer expenditure

What happens to borrowers when the rate of interest increases?

• They are encouraged to borrow more

• They pay more interest on their loans

• They pay less interest on their loans

Printing more money most likely cause increase in....

• Trade

• Increase in inflation

• Increase in public welfare

• Increase GDP

Government will sell the bonds when they have to .......

• Increase money supply

• Decrease the money supply

• To increase inflation