Economics - Economics Section 2
- Option : A
- Explanation : 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?
- Option : C
- Explanation : 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:
- Option : B
- Explanation : To fulfill its role as a medium of exchange, money should have a high value relative to its weight.
- Option : B
- Explanation : 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.
- Option : B
- Explanation : 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.
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