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

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. According to Supply-side economists. if taxes are cut so that people have an increased incentive to work and businesses have an increased incentive to invest ?

   A. aggregate supply will increase will increase aggregate demand will decrease and the price level will decrease
   B. aggregate supply will increase will increase aggregate output will increase and the price level will decrease
   C. aggregate supply will increase will increase aggregate output will increase and the price level will increase
   D. both aggregate supply and demand will increase will increase and the price level will increase

3. According to supply-side economists if taxes are cut so that people have an increased incentive to work and businesses have an increased incentive to invest ?

   A. aggregate supply will increase , aggregate demand will decrease
   B. aggregate supply will increase, aggregate output will increase and the price level will decrease
   C. aggregate supply will increase aggregate output will increase and the price level will increase
   D. both aggregate supply and demand will increase and the price level will increase

4. 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

5. Speculators in foreign exchange markets do all of the following except ?

   A. attempt to profit by trading on expectations about future currency prices
   B. bear risk as they attempt to ____ beat the market||
   C. attempt to buy currency at a low price and later resell that currency at a higher price
   D. Simultaneously buy a currency at a low price and sell that currency at a higher price, making a riskless profit

6. Currency speculation is _____ if speculators bet against market forces that cause exchange fluctuations, thus moderating such fluctuations ?

   A. destabilizing
   B. stabilizing
   C. inflationary
   D. deflationary

7. Which fixed exchange rates and no private capital flows, to correct a balance of payments deficit, the central bank will _______ and ________ ?

   A. buy foreign exchange, sell domestic currency
   B. sell foreign exchange buy domestic currency
   C. buy foreign exchange buy domestic currency
   D. sell foreign exchange sell domestic currency

8. Suppose the equilibrium price for apartments is Rs500 per month and the government imposes rent controls of Rs250 Which of the following is unlikely to to occur as a result of the rent controls?

   A. There may be long lines of buyers waiting for apartments
   B. Landlords may discriminate among apartment renters
   C. Landlords may be offered bribes to rent apartments
   D. there will be a storage of housing
   E. the quality of apartments will improve

9. perfect international capital mobility suggests that international funds will be responsive to ________ differentials?

   A. current account
   B. interest rate
   C. tax
   D. price

10. “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