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Economic Policy and Intervention

Description: This quiz covers various aspects of economic policy and intervention, including fiscal policy, monetary policy, trade policy, and government regulations.
Number of Questions: 15
Created by:
Tags: economics economic policy fiscal policy monetary policy trade policy government regulations
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Which of the following is a primary goal of fiscal policy?

  1. To stabilize the economy

  2. To promote economic growth

  3. To reduce unemployment

  4. To control inflation


Correct Option: A
Explanation:

Fiscal policy aims to stabilize the economy by influencing aggregate demand through government spending and taxation.

What is the primary tool of monetary policy?

  1. Interest rates

  2. Reserve requirements

  3. Open market operations

  4. Discount rate


Correct Option: C
Explanation:

Open market operations are the primary tool of monetary policy, involving the buying and selling of government securities to influence the money supply.

Which of the following is a common trade policy instrument?

  1. Tariffs

  2. Quotas

  3. Embargoes

  4. Subsidies


Correct Option: A
Explanation:

Tariffs are a common trade policy instrument, imposing a tax on imported goods to protect domestic industries.

What is the purpose of government regulations in the economy?

  1. To protect consumers from harmful products

  2. To ensure fair competition

  3. To promote economic stability

  4. To redistribute income


Correct Option: A
Explanation:

Government regulations aim to protect consumers from harmful products, ensure fair competition, and promote economic stability.

What is the term for government spending that is not directly related to the provision of public goods and services?

  1. Transfer payments

  2. Public investment

  3. Government consumption

  4. Social security


Correct Option: A
Explanation:

Transfer payments are government spending that is not directly related to the provision of public goods and services, such as social security benefits and unemployment insurance.

Which of the following is a type of fiscal policy that involves increasing government spending or cutting taxes to stimulate the economy?

  1. Expansionary fiscal policy

  2. Contractionary fiscal policy

  3. Neutral fiscal policy

  4. Discretionary fiscal policy


Correct Option: A
Explanation:

Expansionary fiscal policy involves increasing government spending or cutting taxes to stimulate the economy.

What is the primary goal of monetary policy?

  1. To stabilize prices

  2. To promote economic growth

  3. To reduce unemployment

  4. To control inflation


Correct Option: A
Explanation:

The primary goal of monetary policy is to stabilize prices, which helps to maintain the value of the currency and promote economic stability.

Which of the following is a type of trade policy that restricts the quantity of a good that can be imported?

  1. Tariffs

  2. Quotas

  3. Embargoes

  4. Subsidies


Correct Option: B
Explanation:

Quotas are a type of trade policy that restrict the quantity of a good that can be imported.

What is the term for government regulations that aim to protect consumers from harmful products?

  1. Consumer protection regulations

  2. Environmental regulations

  3. Labor regulations

  4. Antitrust regulations


Correct Option: A
Explanation:

Consumer protection regulations are government regulations that aim to protect consumers from harmful products.

Which of the following is a type of government intervention in the economy that involves setting a minimum price or wage?

  1. Price controls

  2. Wage controls

  3. Rent controls

  4. Interest rate controls


Correct Option: A
Explanation:

Price controls are a type of government intervention in the economy that involves setting a minimum price or wage.

What is the term for government spending that is intended to provide public goods and services?

  1. Public investment

  2. Government consumption

  3. Transfer payments

  4. Social security


Correct Option: A
Explanation:

Public investment is government spending that is intended to provide public goods and services.

Which of the following is a type of monetary policy that involves increasing the money supply?

  1. Expansionary monetary policy

  2. Contractionary monetary policy

  3. Neutral monetary policy

  4. Discretionary monetary policy


Correct Option: A
Explanation:

Expansionary monetary policy involves increasing the money supply.

What is the term for government regulations that aim to promote fair competition in the economy?

  1. Antitrust regulations

  2. Consumer protection regulations

  3. Environmental regulations

  4. Labor regulations


Correct Option: A
Explanation:

Antitrust regulations are government regulations that aim to promote fair competition in the economy.

Which of the following is a type of trade policy that involves imposing a tax on imported goods?

  1. Tariffs

  2. Quotas

  3. Embargoes

  4. Subsidies


Correct Option: A
Explanation:

Tariffs are a type of trade policy that involves imposing a tax on imported goods.

What is the term for government spending that is intended to redistribute income from higher-income earners to lower-income earners?

  1. Transfer payments

  2. Public investment

  3. Government consumption

  4. Social security


Correct Option: A
Explanation:

Transfer payments are government spending that is intended to redistribute income from higher-income earners to lower-income earners.

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