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Questions and Answers
What is the primary objective of monetary policy?
What is the primary objective of monetary policy?
- Controlling inflation and stabilizing the currency (correct)
- Regulating the stock market and bond yields
- Maximizing employment and economic growth
- Balancing trade deficits and surpluses
Which entity is typically responsible for formulating and implementing monetary policy?
Which entity is typically responsible for formulating and implementing monetary policy?
- Ministry of Finance
- World Bank
- International Monetary Fund
- Central bank (correct)
How does expansionary monetary policy affect interest rates?
How does expansionary monetary policy affect interest rates?
- It raises interest rates to control inflation
- It lowers interest rates to stimulate borrowing and spending (correct)
- It has no impact on interest rates
- It only affects short-term interest rates, not long-term rates
What is the primary tool used in expansionary monetary policy?
What is the primary tool used in expansionary monetary policy?
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Which of the following is an example of contractionary monetary policy?
Which of the following is an example of contractionary monetary policy?
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How does a central bank use the discount rate as a monetary policy tool?
How does a central bank use the discount rate as a monetary policy tool?
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