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.Management Sciences
Category: Money, Interest Rates And Output
A fall in investment demand can result from ?
A. higher interest rates
B. lower expected future profits
C. more expensive capital goods
D. All of the above
Which of the following is not a function of money ?
A. hedge against inflation
B. Medium of exchange
C. unit of account
D. Store of value
Government Securities with terms of more than one year are called ?
A. bills of exchanges
B. government bonds
C. Treasury bills
D. Capital bills
Reserve requirements that may be imposed on an economy’s banks by its central bank specify that banks by its central bank specify that banks reserve must be a minimum percentage of them ?
A. assets
B. deposits
C. loans
D. government bonds
The idea the government spending causes a reduction in private investment is called ?
A. fiscal drag
B. investment blight
C. crowding-out
D. the Thatcher effects
The refinancing rate is ?
A. The interest rate at Which commercial banks lend to and borrow from each other
B. The interest rate the European Central Bank pays on reserves
C. The interest rates the public pays when borrowing from banks
D. The interest rates the European Central Bank charges on loans to banks
E. He interests rate banks pay on the public’s deposits
The curve that illustrates the negative relationship between the equilibrium values of aggregate output and the interest rate in the goods market is the ?
A. aggregate supply curve
B. LM curve
C. aggregate demand curve
D. IS curve
Suppose the State Bank purchases a Rs 1,000 government bond from you. If you deposit the entire Rs 1,000 in you bank what is the total potential change in the money supply as a result of the State Bank’s action if the your bank’s reserve ratio is 20 percent ?
A. Rs 4,000
B. Rs 5,000
C. Rs 1,000
D. Rs 0
The primary function of bank is to ?
A. Control the money supply
B. Provide notes and coins for trade
C. Make a profit
D. Provide a cheque clearing system
The chain of events that results from an expansionary monetary policy is ?
A. aggregate output increases the demand for money increase the interest rate increase planned investment
B. money supply increases the interest rate decrease planned investment increases aggregate output increases and money demand increase
C. money supply increases the interest rate increase planned investment increases aggregate output increases and money demand increases
D. money demand increases the interest rate decreases planned investment increases aggregate output increases and money demand increases
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