Economics MCQ - Economics Section 2

41 Two analysts make the following statements:
Analyst 1: Monetary policy seeks to influence the macro economy by influencing the quantity of money and credit in the economy. On the other hand, fiscal policy involves the use of government spending and taxation to influence economic activity.
Analyst 2: Fiscal policy seeks to influence the macro economy by influencing the quantity of money and credit in the economy. On the other hand, monetary policy involves the use of government spending and taxation to influence economic activity.
Which analyst is most likely correct?

Monetary policy seeks to influence the macro economy by influencing the quantity of money and credit in the economy, while fiscal policy involves the use of government spending and taxation to influence economic activity.

42 Which of the following is most likely to be a goal of fiscal policy?

The primary goal of a fiscal policy is to use taxation and spending to influence the economic activity.

43 To fulfill its role as a medium of exchange, money should least likely:

To fulfill its role as a medium of exchange, money should have a high value relative to its weight.

44 Money is used to buy goods and services, does not perish physically, and defines the price of goods and services. The most appropriate terms for these functions of money are:

Money can buy goods and services – medium of exchange. Money does not perish physically – acts as a store of wealth. Money can define price of goods and services – unit of account.

45 The term used to describe notes and coins in circulation in an economy, plus other very highly liquid deposits is most likely:

Narrow money generally means notes and coins in circulation in an economy, plus other very highly liquid deposits. Broad money: Narrow money plus the entire range of liquid assets used to make purchases.