In the short-run period, the central Bank can influence the level of interest rates by changing the Select one: a. supply of money through open market operations. b. currency exchange rate c. demand for money through changes in reserve requirements. d. demand for money through open market operations.
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- In the short run, if the central bank decreases the money supply, the currency will and output will O appreciate; rise O appreciate; fall O depreciate; rise O depreciate; fallWhich of the following is NOT a function of money? A. A medium of exchange B. A measure of inflation C. A store of value D. A unit of account Which function of money is best served by bitcoin? A. A medium of exchange B. A unit of account C. A store of value The ease at which an asset can be converted into a medium of exchange is known as A. Inflation B. Profitability C. Liquidity D. Wealth Economists have documented Pacific island economies in which large rocks and boulders were used as money. While this may work for a group of people who only transact with others on the island, the rocks would not be a useful form of money in the world economy because: A. Large rocks are not easily standardized B. Large rocks are not easily divisible C. Large rocks are not easy to carry D. All of the above are true In the mid 1800's, grain sellers in Chicago…Which of the following will not affect the money market? O a. Money supply O b. Price of one good c. Expansionary monetary policy O d. Contractionary monetary policy
- 1. When a central bank sterilizes a foreign exchange purchase, it offsets the purchase with a. an open market purchase to increase the money supply b. an open market sale to decrease the money supply c. an open market purchase to keep the money supply from changing d. an open market sale to keep the money supply from changingFor each of the following monetary policy tools:A. The BSP buys securities in the open market.B. The BSP sells foreign exchange currentC. The BSP increases the reserve requirement ratio.D. The BSP applies its moral suasion ability requesting commercial banks to lowerdown interest rates.E. The government decided to deposit funds at the BSP. State what happens to equilibrium interest rate and equilibrium quantity of money,How can a commercial bank "create" money? Select one: O a. by making loans O b. by increasing the rate of inflation O c. by issuing its own Central Bank bonds O d. by selling government Treasury bills to the commercial banks O e. by selling some of its foreign-currency reserves for domestic currency
- For the following operations, what happens to thecentral bank’s and commercial bank’s reserves andthe monetary base? Use T-account to show changes inbalances. Assume that the amount is $10 million.a. The central bank provides loan to commercial bank.b. The central bank sells securities to the commercial bank.c. The commercial bank repays the loan to the central bank.Which of the following statements about money that is correct? A. Credit cards and debit cards are examples of money. B. Inflation brings a rising value of money. C. Without a medium of exchange, goods and services must be exchanged directly for other goods and services. D.According to the Seeking Alpha article, the velocity of money is O needed for creating credit O explains why South Korea is increasing its money supply O looks at deflationary trends V None of these O leading to inflation
- For each of the following monetary policy tools:A. The BSP buys securities in the open market.B. The BSP sells foreign exchange currentC. The BSP increases the reserve requirement ratio.D. The BSP applies its moral suasion ability requesting commercial banks to lowerdown interest rates.E. The government decided to deposit funds at the BSP. Determine the effect of the monetary tool on the money market by a graphicalillustration.Which of the following is NOT a function of money? A. A medium of exchange B. A measure of inflation C. A store of value D. A unit of accountWhat is the main tool used by central banks to influence short-term interest rates and the money supply? A. Fiscal policy B. Open market operations C. Exchange rate policy D. Price controls