Monetary, Fiscal & Incomes Policy, & Inflation Mcqs

1.

Under financial repression ?
I- banks engage in non-price rationing of loans
II- banks face pressure for loans to those with political connections
III- banks charge a high premium on foreign investments
IV- banks depend on foreign banks to set interest rates

A. I and II only

B. III and IV only

C. I, II and III only

D. I, II , III and IV

Answer & Solution Discuss in Board

2.

Which of the following are costs of inflation ?
I- inflation weakens the creation of credit and capital markets
II- inflation distorts business behavior especially investment behavior
III- inflation increase the price of foreign goods relative to domestic goods
IV- Inflation imposes a tax on the holders of money

A. I and II only

B. III and IV only

C. I, II and IV only

D. I, II and III only

Answer & Solution Discuss in Board

3.

Central banks in LDCs generally have less effect on expenditure and output than in LDCs because of ?
I- an externally dependent banking system
II- a poorly developed securities market
III- a low percentage of demand deposits divided by the total money supply
IV- the relative insensitivity of investment and employment to monetary policies

A. I and II only

B. III and IV only

C. I, II and III only

D. I, II , III and IV

Answer & Solution Discuss in Board

4.

When the financial system lacks the capability of making judgement about investment opportunities due to asymmetric information leading to potentially bad credit risks lending is subject to ?

A. adverse selection

B. moral hazard

C. social goods

D. hyperinflation

Answer & Solution Discuss in Board

5.

Which of the following is NOT true ?

A. Taxes on international trade are the major source of tax revenue for low-income countries with poor administrative capacity

B. import duties can restrict luxury goods consumption

C. several LDCs have used value-added taxes to raise a substantial fraction of revenues

D. Cascade tax a form of progressive tax, is dominant in DCs

Answer & Solution Discuss in Board

6.

The property tax wealth tax inheritance tax and income taxes such as persona and corporate taxes are ?

A. indirect taxes

B. direct taxes

C. inelastic

D. value-added tax

Answer & Solution Discuss in Board

7.

_______ states that as real GNP per capita rises, people demand relatively more social goods and relatively fewer private goods?

A. incomes policy

B. Moral hazard

C. Wagner’s law

D. Fiscal policy

Answer & Solution Discuss in Board

8.

By using fiscal policy, i (e) varying __ and/or _ governments achieve goals for output and employment growth as well as price stability?

A. demand pull inflation tax elasticity

B. interest rates, financial liberalization

C. interest rates, tax rates

D. tax rates, government spending

Answer & Solution Discuss in Board

9.

Demand pull inflation result from ?

A. demand for government spending on public goods goes due to lack of financial backup through tax collection

B. consumer business and government demand for goods and services in excess of an economy’s capacity to produce

C. a shortage of demand for goods and services in excess of supply during depression

D. demand for public goods is greater than demand for consumer goods

Answer & Solution Discuss in Board

10.

With _______ prices rise in the first sector, remain the same in the second and increase overall?

A. ratchet inflation

B. inflationary expectations

C. import substitution

D. demand pull inflation

Answer & Solution Discuss in Board

Practice MCQ Questions and answers on Monetary, Fiscal & Incomes Policy, & Inflation Mcqs

1. Under financial repression ? I- banks engage in non-price rationing of loans II- banks face pressure for loans to those with political connections III- banks charge a high premium on foreign investments IV- banks depend on foreign banks to set interest rates

Answer & Solution

Answer & Solution

Answer & Solution

4. When the financial system lacks the capability of making judgement about investment opportunities due to asymmetric information leading to potentially bad credit risks lending is subject to ?

Answer & Solution

5. Which of the following is NOT true ?

Answer & Solution

6. The property tax wealth tax inheritance tax and income taxes such as persona and corporate taxes are ?

Answer & Solution

7. _______ states that as real GNP per capita rises, people demand relatively more social goods and relatively fewer private goods?

Answer & Solution

8. By using fiscal policy, i (e) varying ______ and/or _____ governments achieve goals for output and employment growth as well as price stability?

Answer & Solution

9. Demand pull inflation result from ?

Answer & Solution

10. With _______ prices rise in the first sector, remain the same in the second and increase overall?

Answer & Solution

Read More Section(Economics Mcqs)

1.

Under financial repression ?
I- banks engage in non-price rationing of loans
II- banks face pressure for loans to those with political connections
III- banks charge a high premium on foreign investments
IV- banks depend on foreign banks to set interest rates

4.

When the financial system lacks the capability of making judgement about investment opportunities due to asymmetric information leading to potentially bad credit risks lending is subject to ?

5.

Which of the following is NOT true ?

6.

The property tax wealth tax inheritance tax and income taxes such as persona and corporate taxes are ?

7.

_______ states that as real GNP per capita rises, people demand relatively more social goods and relatively fewer private goods?

8.

By using fiscal policy, i (e) varying __ and/or _ governments achieve goals for output and employment growth as well as price stability?

9.

Demand pull inflation result from ?

10.

With _______ prices rise in the first sector, remain the same in the second and increase overall?