Monetary Theory & Public Finance MCQs

Which of the following is NOT a component of the money supply?

A) M1

B) M2

C) M3

D) GDP

What is the term for the total value of goods and services produced in an economy in a given period?

A) Money supply

B) Gross Domestic Product (GDP)

C) Fiscal deficit

D) Trade surplus

What is the purpose of a budget deficit?

A) To reduce government borrowing

B) To stimulate economic growth

C) To increase public debt

D) To reduce inflation rates

Which government body is responsible for formulating monetary policy in the United States?

A) S. Department of the Treasury

B) Federal Reserve System (Fed)

C) Securities and Exchange Commission (SEC)

D) Department of Commerce

What is the role of the Securities and Exchange Commission (SEC)?

A) To regulate international trade

B) To oversee monetary policy

C) To regulate financial markets and protect investors

D) To manage government expenditure

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

A) Increasing government spending

B) Decreasing interest rates

C) Decreasing taxes

D) Increasing taxes

What is the purpose of quantitative easing?

A) To increase interest rates

B) To reduce inflation

C) To stimulate economic growth

D) To decrease money supply

What does OMO stand for in the context of monetary policy?

A) Open Market Operations

B) Output Management Objectives

C) Order Management Operations

D) Operational Monetary Outcomes

Which of the following is an example of regressive taxation?

A) Corporate income tax

B) Value-added tax (VAT)

C) Property tax

D) Sales tax

Which economic concept refers to the total amount of money in circulation within an economy?

A) Budget deficit

B) Money supply

C) Fiscal policy

D) Inflation rate