CFA 2026 Level I Economics Monetary Policy Free Quiz 2

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CFA 2026 Level I Economics Monetary Policy Free Quiz 2

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CFA 2026 Level I Economics Monetary Policy Free Quiz 2

Practice CFA 2026 Level I Economics MCQs from Monetary Policy. Get instant results with Explanation.

General5 MCQs

11. What is the Fisher equation?

A. MV = PYB. M = kPYC. i = r + π^eD. π = f(u)

12. What is the money multiplier?

A. Deposit multiplierB. Credit multiplierC. Fiscal multiplierD. Money multiplier

13. What is the monetary base?

A. Currency in circulation + bank reservesB. M1 money supplyC. M2 money supplyD. Money multiplier

14. How does a central bank implement monetary policy?

A. Government spending and taxationB. Open market operations, discount rate, reserve requirementsC. Tariffs and trade agreementsD. Deregulation and tax incentives

15. What is inflation targeting?

A. Price level targetingB. Monetary targetingC. Inflation targetingD. Exchange rate targeting

General5 MCQs

16. Why are central banks typically independent?

A. Central bank is controlled by the government.B. Central bank is controlled by commercial banks.C. Central bank is not independent.D. Central bank is independent to focus on price stability.

17. What is the effect of an increase in the money supply on interest rates and aggregate demand?

A. Lowers interest rates and stimulates aggregate demand.B. Raises interest rates and reduces aggregate demand.C. Lowers output and raises unemployment.D. Lowers inflation and raises unemployment.

18. What is the neutrality of money?

A. Money is neutral in the long run.B. Money affects real variables in the long run.C. Money has no effect on the price level.D. Money affects output positively in the long run.

19. What is quantitative easing?

A. Open market operations in short-term securitiesB. Changing the discount rateC. Quantitative easing (buying longer-term securities)D. Changing reserve requirements

20. What is the zero lower bound problem in monetary policy?

A. Inflation constraintB. Exchange rate constraintC. Fiscal constraintD. Zero lower bound

📋 CFA - Test Online Practice Quizzes

CFA

Conducting Body: CFA Institute

Frequency: 4 times a year (February, May, August, November) | Time: 135 Minutes

Negative Marking: No

⚡ Test Pattern (Total: 90 MCQs):

Alternative Investments: 8 MCQs
Corporate Issuers: 7 MCQs
Derivatives: 5 MCQs
Economics: 7 MCQs
Equity Investments: 12 MCQs
Ethics: 16 MCQs
Financial Statement Analysis: 11 MCQs
Fixed Income: 11 MCQs
Portfolio Management: 9 MCQs
Quant Methods: 6 MCQs

Merit Formula: -

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