Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by whitelisting our website.

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 ?

Economics Mcqs, Interest Rates And Output, Money /
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

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 ? Read More »

Economics Mcqs, Interest Rates And Output, Money

Which of the following policy actions by a central bank is likely to increase the money supply ?

Economics Mcqs, Interest Rates And Output, Money /
Which of the following policy actions by a central bank is likely to increase the money supply ?

A. Increasing the refinancing rate
B. All of these will increase the money supply
C. Buying government bonds in open market operations
D. Increasing reserve requirements

Which of the following policy actions by a central bank is likely to increase the money supply ? Read More »

Economics Mcqs, Interest Rates And Output, Money

Suppose Imtiaz moves his Rs1,000 demand deposit from Bank A to Bank B. If both banks operate with a reserve ratio of 10 percent What is the potential change in money supply as a result of Gerard’s action ?

Economics Mcqs, Interest Rates And Output, Money /
Suppose Imtiaz moves his Rs1,000 demand deposit from Bank A to Bank B. If both banks operate with a reserve ratio of 10 percent What is the potential change in money supply as a result of Gerard’s action ?

A. Rs 10,00
B. Rs 1,000
C. Rs 9,000
D. Rs 0

Suppose Imtiaz moves his Rs1,000 demand deposit from Bank A to Bank B. If both banks operate with a reserve ratio of 10 percent What is the potential change in money supply as a result of Gerard’s action ? Read More »

Economics Mcqs, Interest Rates And Output, Money

Bance Solida has, in the past, always operated with a reserve ratio of 25 percent. It has now been taken over by Gung-Ho Bank Which operates with a reserve ration of 12½ percent, Assuming that Banca Solida adopts the business practices of its new owner, What will be the effect on money supply in the country in which Banca Solida operates ?

Economics Mcqs, Interest Rates And Output, Money /
Bance Solida has, in the past, always operated with a reserve ratio of 25 percent. It has now been taken over by Gung-Ho Bank Which operates with a reserve ration of 12½ percent, Assuming that Banca Solida adopts the business practices of its new owner, What will be the effect on money supply in the country in which Banca Solida operates ?

A. Money supply will increase because Banca Solida will increase its loans
B. The effect on money supply cannot be determined from the information given
C. Money supply will decrease because the loans will have to be repaid
D. Money supply will be unchanged because the central bank has made no policy changes

Bance Solida has, in the past, always operated with a reserve ratio of 25 percent. It has now been taken over by Gung-Ho Bank Which operates with a reserve ration of 12½ percent, Assuming that Banca Solida adopts the business practices of its new owner, What will be the effect on money supply in the country in which Banca Solida operates ? Read More »

Economics Mcqs, Interest Rates And Output, Money

One of the transmission mechanisms of monetary policy is through consumer demand when interest rates ________ household wealth ________ and consumption _________?

Economics Mcqs, Interest Rates And Output, Money /
One of the transmission mechanisms of monetary policy is through consumer demand when interest rates ________ household wealth ________ and consumption _________?

A. rise; increase, increase
B. rise, falls, increase
C. rise, increase, falls
D. rise, falls, falls

One of the transmission mechanisms of monetary policy is through consumer demand when interest rates ________ household wealth ________ and consumption _________? Read More »

Economics Mcqs, Interest Rates And Output, Money