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
Correct Answer: A decrease in the price level ✔
Last Updated: June 18, 2019
Related MCQs
- A reduction in interest rates, causes an increases in the monetary base that results in an __ in the availability of consumer credit and a ________ in the cost of consumer credit?
- Central banks prefer to fix the ____ and accept the resulting _____?
- If the central bank buys financial securities in the open market to increase the monetary base, this is and example of ?
- M4 is a measure of money and includes deposits at both _ and _________?
- When interest rate rise, other things equal, we can expect the quantity of real money holding to ?
- If the keep some money available in case I see a bargain this is an example of ?
- If banks and the private sector decide to hold less cash the money multiplier will be ?
- Banks create money by ?
- Money has 3 main function they are and __________?
- Each point on the LM curve represents the equilibrium point in the ?
- The curve that illustrates the positive relationship between the equilibrium values of aggregate output and the interest rate in the money market is the ?
- Each point on the IS curve represents the equilibrium point in the ?
- The way in which government spending is supposed to reduce investment is by increasing ?
- The idea the government spending causes a reduction in private investment is called ?
- If The Central bank tries to keep the interest rate constant when the economy is operating on the steep part of the AS curve, _________ will occur?
- If the investment demand curve is vertical ?
- An example of an expansionary monetary policy is ?
- The interest rate is determined in ?
- The equilibrium level of aggregate output is determined in ?
- The demand for money represents the idea that there is ?
- The motive for holding money that encourages investors to hold bonds when interest rates are low, with the hope of selling them when interest rates are high, is the ?
- When economies speak of the demand for money which of the following are they asking ?
- Assume that commercial banks are holding excess reserves because business firms and consumers are not willing to borrow money A decrease in the discount rate is likely to ?
- As the required reserve ratio is decreased the money multiplier ?
- Which of the following activities is one of the responsibilities of the Bank of England to the banking system ?
- Which of the following is included in broad money, but not included in narrow money ?
- An item designated as money that is intrinsically worthless is ?
- Government Securities with terms of more than one year are called ?
- If there is a general shortage of liquidity in the money market then ?
- The three main tools of monetary policy are ?
- 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 ?
- Which of the following policy actions by a central bank is likely to increase the money supply ?
- 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 ?
- 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 ?
- Commodity money ?
- Which of the following is not a function of money ?
- A fall in investment demand can result from ?
- One of the transmission mechanisms of monetary policy is through consumer demand when interest rates household wealth _ and consumption _________?
- Equilibrium in the Money market will change if there is ?
- The monetary base is _ and _________?
- When real income increases other things equal we can expect the demand for real money holdings to ?
- Three variables affect the demand for money they are and __________?
- The money supply is ?
- The primary function of bank is to ?
- 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 __________?
- When the money supply increase ?
- The curve that illustrates the negative relationship between the equilibrium values of aggregate output and the interest rate in the goods market is the ?
- If planned investment becomes more sensitive to interest rate changes the crowding out effect will ?
- If the central bank increases the money supply at the same time as the government increasing spending, it is suggested that investment will ?
- According to the simple Keynesian view the aggregate supply curve is ?
- For the Central bank to keep the interest rat unchanged as the government increase spending, the Central Bank must continue to ?