Deck 11: Macroeconomic Policies and Business Cycles

Question 1

Open market operations refer to the sale and purchase by the RBI of :

A)Gold
B)Foreign exchange
C)Government securities
D)All the above

Answer 1

Government securities

Question 2

Which of the following is not an objective of monetary policy?

A)Price stability
B)Balance of Payments equilibrium
C)Economic growth
D)Reduction in export

Answer 2

Reduction in export

Question 3

Which of the following is not an element of high Powered money?

A)Currency
B)Repos
C)Required Reserves
D)Excess reserves

Answer 3

Repos

Question 4

The ratio of money supply to high powered money is:

A)SLR
B)CRR
C)Money Multiplier
D)Bank rate

Question 5

Fiscal Policy is a policy of the

A)Central bank
B)Government
C)Finance commission
D)Finance minister

Question 6

Fiscal Policy includes:

A)Expenditure policy
B)Tax policy
C)both a and b
D)neither a nor b.

Question 7

The objective of Monetary Policy is :

A)to print notes of desired denominations
B)to control cost and supply of money
C)to provide loan to government
D)none of these

Question 8

Fiscal Policy refers to policy towards:

A)Public revenue
B)public expenditure
C)public debt
D)all of the above

Question 9

In a closed economy which of the following is not a macroeconomic objective?

A)National income growth
B)price level stability
C)BOP stability
D)employment

Question 10

A business cycle is composed of ----- phases:

A)2 Phase
B)3 Phase
C)4 Phase
D)No Phase

Question 11

The percentage of deposits of commercial banks statutorily kept with the RBI is :

A)Cash Reserve Ratio
B)Statutory Liquidity Ratio
C)Repo Rate
D)None of these

Question 12

Peak is the --- turning point of the business cycle.

A)Upper turning point
B)Lower turning point
C)Middle turning point
D)None of these

Question 13

Wage control is an instrument of ---- policy

A)Fiscal policy
B)Monetary policy
C)Incomes policy
D)None of these

Question 14

ISLM model was basically…………sector model:

A)Two
B)One
C)Three
D)Four

Question 15

Original IS-LM model is a ……..model.

A)Open
B)Closed
C)Both
D)None

Question 16

ISLM is used to determine:

A)income
B)interest
C)Both
D)All

Question 17

The steepness of the IS curve depends on:

A)change in interest
B)Size of the multiplier
C)both
D)None

Question 18

Who develop the ISLM open economy model?

A)Mundell
B)Fleming
C)Both
D)None