A. Transactions motive
B. precautionary motive
C. profit motive
D. speculation motive

A. A sale of government securities by the central bank
B. An increase in the level of aggregate output
C. An increase in the discount rate
D. A decrease in the price level

A. How much cash do you wish you could have?
B. How much wealth would you like?
C. How much income would you like to earn?
D. What proportion of your financial assets do you want to hold in non-interest-bearing forms

A. increase the money supply because it is now cheaper for banks to borrow from the central bank
B. decrease the money supply because it will now be more expensive for business firms and consumers to borrow money
C. Not change the money supply because banks already have excess reserves they cannot lend
D. Decrease the money supply because it is now cheaper for banks to borrow from the central bank instead instead of buying government securities

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.

A. savings accounts
B. Travelers checks
C. Currency held outside banks
D. Automatic-transfer savings accounts

A. precious metals
B. commodity money
C. fiat money
D. barter items

A. bills of exchanges
B. government bonds
C. Treasury bills
D. Capital bills

A. The banks will increase their lending
B. The short-term interest rate at which the economy’s commercial banks lend to and borrow from each other will fall and the central bank may be expected to reduce the supply of liquidity to the banks
C. The short-term interest rate at which the economy’s commercial banks lend to and borrow from each other will rise and the long-term interest rate may be expected to rise as a result
D. the long-term interest rate in the economy will rise and the central bank will raise its interest rate in response
E. The short-term interest rate at which the economy’s commercial banks lend to and borrow from each other will rise and the central bank may be expected to increase the supply of liquidity to the banks.

A. fiat, commodity and deposit money
B. Open-market operations reserve requirements and the refinancing rate
C. The money supply, government purchases and taxation
D. Government expenditures taxation and reserve requirements
E. Coin, currency and demand deposits