Central banks in LDCs generally have less effect on expenditure and output than in LDCs because of ?

Related Mcqs:

1. Reserve requirements that may be imposed on an economy’s banks by its central bank specify that banks by its central bank specify that banks reserve must be a minimum percentage of them ?

   A. assets
   B. deposits
   C. loans
   D. government bonds

2. Which function is performed by both commercial banks and central banks ?

   A. Acting as bankers to the government
   B. Advising the government on monetary policy
   C. Dealing in foreign exchange
   D. Fixing the main interest rate

3. Suppose an oligopolist individually maximizes its profits. When calculating profits, if the output effect exceeds the price effect on the marginal unit of production, then the oligopolist ?

   A. Should produce more units
   B. has maximized profits.
   C. is in a Nash equilibrium
   D. Should produce fewer units
   E. should exit the industry.

4. The substitution effect of a rise in the price of labour will ____ the quantity of labour and the output, effect will ____ it

   A. increase; increase
   B. increase; reduce
   C. reduce; reduce
   D. reduce; increase

5. Central bank’s rate of lending to commercial banks is called ?

   A. Interest rate
   B. Discount rate
   C. Money rate
   D. Control rate

6. Central banks prefer to fix the ____ and accept the resulting _____?

   A. demand for money, interest rate
   B. interest rate equilibrium money supply
   C. demand for money equilibrium money supply
   D. interest rate, demand for money

7. In the absence of international capital controls, central banks set ________ to provide the correct incentive for speculators?

   A. money supply targets
   B. income policy
   C. interest rates
   D. inflation targets

8. “Seigniorage” is a source of revenue for central banks earned from_____________?

   A. Issuance of Debt securities
   B. Issuance of notes and coins
   C. Dollar Reserves
   D. All of above

   Submitted by: Asad Javed

9. If banks and the private sector decide to hold less cash the money multiplier will be ?

   A. Unchanged
   B. Larger
   C. Smaller
   D. Unstable

10. A state planning ideology arose in LDCs as a reaction to nationalist perceptions of ?

    A. Keeping balanced budget, a price target
    B. slow economic growth under colonial capitalism
    C. minimizing public spending in the rural areas
    D. western countries, nation-state ideology