The two most important functions of central banks are to:   Question 12 options:   a)  execute monetary policy and promote competition in the financial sector.   b)  execute monetary policy and keep interest rates low.   c)  execute monetary policy and ensure that there is sufficient home mortgage credit.   d)  execute monetary policy

Which of the following would be an example of expansionary monetary policy a. Purchase back a government bond b. Decrease in the reserved requirements c. Sell government bond d. A and B 

The main responsibility of a Central bank is:     Fiscal but not monetary policy   Monetary but not fiscal policy   Neither monetary or fiscal policy   Both monetary and fiscal policy

The following are entities within the Federal Reserve System, EXCEPT: Treasury Department Federal Reserve Banks Board of Governors Federal Open Market Committee The following are some of the key functions of the Federal Reserve System, EXCEPT: Implement monetary policy

Contrast the actions a central bank would take to increase the quantity of money in the economy with the actions it would take to produce the opposite effect

What is the primary cause of booms and busts in a market economy with a central bank?

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Suppose that the Bank of Canada determines that the Canadian economy is currently overproducing. What can the Central Bank do to slow down economic activity? a. The Central bank can pursue an expansionary monetary policy by increasing the money supply, causing a decrease in the interest rate. As a result, real GDP will increase and the price level will increase. b. The Central bank can pursue a contractionary monetary policy by decreasing the money supply, causing a decrease in the interest rate. As a result, real GDP will decrease and the price level will decrease c. The Central bank can pursue a contractionary monetary policy by decreasing the money supply, causing an increase in the interest rate. As a result, real GDP will decrease and the price level will decrease. d. The Central bank can pursue a contractionary monetary policy by decreasing the money supply, causing an increase in the interest rate. As a result, real GDP will decrease and the price level will increase e. The…

Question 8 Which of the following are true about fiscal and monetary policy? There may be more than one answer. a) A change in tax policies can affect output in the long-run. b) A change in government purchases can affect output in the short-run. c) Since money supply can only affect prices, it can never affect output in the long-run. d) Since money supply can only affect prices, it can never affect output in the short-run.

Explain the type of policies a central bank can implement to raise the interest rate