Miscellaneous Economic MCQs

The interest rate charged by the central bank to commercial banks for short-term loans is called the:

A) Discount rate

B) Prime rate

C) LIBOR rate

D) Treasury rate

Which of the following is a primary function of financial markets?

A) Providing loans to the government

B) Allocating capital and resources efficiently

C) Setting exchange rates between currencies

D) Regulating interest rates

What is the primary purpose of monetary policy?

A) Regulate government spending

B) Control inflation and stabilize prices

C) Regulate financial markets

D) Ensure a balanced budget

Which financial instrument represents ownership in a corporation?

A) Bond

B) Treasury bill

C) Stock

D) Certificate of deposit

What is the main role of investment banks in financial markets?

A) Providing retail banking services to individuals

B) Advising corporations on mergers and acquisitions

C) Issuing government bonds and securities

D) Regulating stock exchanges

Which statistical measure is used to describe the dispersion of data around the mean?

A) Mean

B) Median

C) Variance

D) Mode

What is the purpose of regression analysis in econometrics?

A) Test hypotheses about population parameters

B) Analyze time series data

C) Predict future economic trends

D) Estimate relationships between variables

The Consumer Price Index (CPI) is used to measure changes in:

A) Unemployment rates

B) Inflation rates

C) Gross Domestic Product (GDP)

D) Money supply

Which of the following is a limitation of using GDP as a measure of economic welfare?

A) Ignores income distribution

B) Includes non-market activities

C) Excludes government spending

D) Focuses only on consumption

What does the term “stationarity” refer to in time series analysis?

A) Predictability of future outcomes

B) Constant mean and variance over time

C) Trends and seasonal fluctuations in data

D) Non-linear relationships between variables