National Fiscal and Monetary Policy - Lecture 4

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1. Which of the following is an effect of lowering Interest rates?

  • Improves external value of currency.
  • Cheaper borrowing, meaning less incentive to save.
  • More expensive loans, meaning larger projects discouraged.
  • Expensive borrowing, meaning more incentive to save.
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2. When was the Bank Of England Established?

  • 1963
  • 1967
  • 1964
  • 1965

3. Which of the following is a cause of Inflation?

  • Cheaper borrowing or tax cuts, leads to higher prices and wages.
  • Reduced costs of raw materials.
  • Equal supply to demand.
  • Civil unrest.

4. How many months does no economy growth have to surpass in order to be known as a Recession?

  • 4 months
  • 3 months
  • 1 month
  • 2 months

5. What is the Monetary Policy?

  • Controlling the interest rates and tax.
  • Controlling the government spending and tax.
  • Controlling the money supply and interest rates.
  • Controlling the money supply and tax.
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