1) 1. What is the primary goal of expansionary monetary policy? a) A. To cool down an overheated economy b) B. To stimulate economic activity during a recession c) C. To stimulate economic activity during a recession d) D. To stabilize the stock market 2) 2. Which of the following actions is typically taken during an expansionary monetary policy? a) A. Raising interest rates b) B. Selling government securities c) C. Lowering interest rates d) D. Reducing the money supply 3) What is a common example of expansionary monetary policy? a) A. The Federal Reserve raising interest rates in the 1980s b) B. The European Central Bank buying government securities c) C. The U.S. Federal Reserve lowering interest rates during the 2008 financial crisis d) D. The Bank of Japan selling bonds to control inflation 4) What does contractionary monetary policy aim to achieve? a) A. To increase consumer spending b) B. To encourage borrowing and investment c) C. To slow down an overheating economy and reduce inflation d) D. To boost economic growth during a recession 5) Which of the following actions is associated with contractionary monetary policy? a) A. Lowering interest rates to encourage borrowing b) B. Purchasing government securities to inject money into the system c) C. Raising interest rates to make borrowing more expensive d) D. Increasing government spending to boost demand

types of monetary policy

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