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.Management Sciences
Category: Money, Interest Rates And Output
The difference between a bank’s actual reserves and its required reserves is its?
A. required reserve ratio
B. profit margin
C. excess reserves
D. net worth
The main reason that people hold money to buy things is referred to as the ?
A. Profit motive
B. Precautionary motive
C. Transactions motive
D. speculation motive
According to the simple Keynesian view the aggregate supply curve is ?
A. downward sloping over all levels of output
B. upward sloping over all levels of output
C. horizontal until it reaches full capacity and then becomes vertical
D. vertical until it reaches full capacity and then becomes horizontal
The way in which government spending is supposed to reduce investment is by increasing ?
A. incomes
B. overseas investment
C. imports
D. interest rates
An example of an expansionary monetary policy is ?
A. a reduction in the taxes banks pay on their profits.
B. an increase in the required reserve ratio
C. an increase in the discount rate
D. the Central bank buying government securities in the open market
When the money supply increase ?
A. the economy moves up the LM curve
B. The LM curves shifts to the left
C. The economy moves down the LM curve
D. The LM curve shift to the right
The monetary base is ________ and _________?
A. bank deposits, building society deposits
B. Currency in circulation, banks cash reserves
C. retail sight deposits building society deposits
D. retail deposits, wholesale deposits
An item designated as money that is intrinsically worthless is ?
A. precious metals
B. commodity money
C. fiat money
D. barter items
Which of the following activities is one of the responsibilities of the Bank of England to the banking system ?
A. Assisting Banks that are in a difficult financial position
B. Auditing the various agencies and department of the government
C. Loaning money to other countries that are friendly to the UK.
D. Issuing new bonds to finance the PSBR.
If banks and the private sector decide to hold less cash the money multiplier will be ?
A. Unchanged
B. Larger
C. Smaller
D. Unstable
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