Fiscal & Monetary Policy

JKSSB Finance Accounts Assistant · General Economics · 16 practice questions with answers and explanations: 4 Easy, 7 Medium, 5 Hard.

Sample questions

Sample Easy question 1

What is 'monetary policy'?

  1. Central bank policy controlling money supply and interest rates
  2. Government spending policy only
  3. Tax collection policy only
  4. Foreign trade policy
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Answer: A. Monetary policy is managed by a central bank to control the money supply and interest rates.

Sample Medium question 2

Which institution is primarily responsible for monetary policy in India?

  1. Reserve Bank of India
  2. Ministry of Finance
  3. SEBI
  4. NITI Aayog
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Answer: A. The RBI is India's central bank, responsible for formulating and implementing monetary policy.

Sample Hard question 3

What does an increase in the repo rate typically aim to achieve?

  1. Curb inflation by making borrowing more expensive
  2. Stimulate borrowing and spending
  3. Increase the money supply directly
  4. Reduce government debt
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Answer: A. A higher repo rate raises the cost of borrowing, which tends to cool spending and inflation.

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