MACROECONOMICS BASIC KNOWLEDGE

What is fiscal policy mainly concerned with?

• controlling the money supply

• government spending and taxation

• regulating interest rates

• managing the stock market

Who is responsible for implementing fiscal policy?

• the central bank

• commercial bank

• private bussiness

• governments

Which of the following is an example of expansionary fiscal policy?

• Raising taxes
  

• Decreasing government spending
  

• Cutting interest rates

• Increasing government spending

What is the main tool of monetary policy?

• interest rates and money supply

• taxation

• government spending

• infrastructure spending

Which institution usually controls monetary policy?

• Commercial Bank

• The Stock Exchange

• Central Bank

• President

If the central bank wants to slow inflation, what is the most likely action it will take?

• Increase interest rates
  

• Lower taxes

• Increase government spending

• Print more money

What happens when the central bank decreases interest rates?

• Economic growth slows

• People save more money
  

• Inflation decreases
  

• Borrowing becomes cheaper
  

Which of the following is an example of contractionary fiscal policy?

• Cutting taxes
  

• Increasing government spending
  

• Reducing government spending

• Raising interest rates
  

GDP measures the total value of

• Only exported goods
  

• Goods and services produced within a country
  

• Goods produced by a country’s citizens anywhere in the world
  

• Only government spending

Which is the main difference between GDP and GNP?

• GNP is higher than GDP in every country
  

• GDP is measured yearly, while GNP is measured monthly
  

• GDP includes only domestic production, while GNP includes income from abroad
  

• GDP includes imports, while GNP does not