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.Management Sciences
Category: Money, Interest Rates And Output
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
Which of the following events will lead to an increase in the demand for money ?
A. An increase in the interest rate
B. An increase in the level of aggregate output
C. A decrease in the price level
D. An increase in the supply of money
Keynesians and monetarists differ over how steep the IS and LM curves actually are Monetarists claim that the IS curve must be __________ and the LM curve must be __________?
A. flat; steep
B. flat; flat
C. steep; flat
D. steep; steep
The equilibrium level of aggregate output is determined in ?
A. the goods and labor markets.
B. the goods market
C. the money markets
D. the money and labor market
For the Central bank to keep the interest rat unchanged as the government increase spending, the Central Bank must continue to ?
A. decrease the money supply
B. increase the money supply
C. increase the demand for money
D. decrease the demand for money
If planned investment becomes more sensitive to interest rate changes the crowding out effect will ?
A. be reduced
B. not be affected
C. fall to zero
D. be increased
As the required reserve ratio is decreased the money multiplier ?
A. decreases
B. remain the same, as long as banks hold no excess reserves
C. could either increase or decrease
D. increases
A checking deposit in a bank in considered _________ of that bank?
A. an asset
B. capital
C. net worth
D. a liability
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