n NISM Certifications
XV NISM Series XV
Medium

What is the likely impact on stock markets when central banks shift from a contractionary policy to an expansionary policy?

Practice question from NISM XV Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. Stock markets are likely to go up

    Correct answer

  2. B

    Stock markets are likely to go down

  3. C

    Fiscal policies have no impact on stock markets

  4. D

    Monetary policies have no impact on stock markets

Why this is the answer

Expansionary monetary policy increases liquidity and lowers interest rates, making equities more attractive and pushing stock markets higher.

Test yourself for real

Take a full NISM Series XV mock test.

Same duration, same weighting, same difficulty distribution as the real exam — with explanations on every question.