Economics Year 2 - Week 21

When banks have insufficient liquidity and are unable to raise funds from elsewhere, the central bank can step in as ______________ providing emergency financing to ensure the bank does not default.

Fall in nominal and real level of interest rates, Measures to expand the supply of credit from the banking system, Depreciation of the external value of the exchange rate: are all aspects of?

• Expansionary Monetary Policy

• Deflationary Monetary Policy

Which of the following are Deflationary Monetary Policies?

• Higher interest rates on both loans and savings

• Tightening of credit supply (i.e. loans become harder to get)

• Depreciation of the external value of the exchange rate

• Fall in nominal and real level of interest rates

• Appreciation of the exchange rate

Setting interest rates, lending money, monitoring the inflation target and currency markets is part of which policy?

Which of these are characteristics of perfect competition?

• some pricing power, but influenced by competition

• each firm is price taker (AR=MR)

• hit and run competition

• homogenous products

• each firm is price taker (AR>MR)

A contestable market has differentiated products, some pricing power and allocative efficiency in the long-run.

• Yes

• No

The Lorenz curve measures what?

• Cumulative % of total national income or wealth against Proportion of population

• Cumulative % of total national income or wealth against Cumulative % of population

• Method of measuring and illustrating extent of income and wealth inequality

• Method of measuring and illustrating extent of income and wealth equality

The higher the value of the Gini-Coefficient, the more inequality there is.

• Yes

• No