banking and monetary policy

The central bank should implement contractionary monetary policy to reduce inflation by

• increasing the discount rate

• decreasing the discount rate

• decreasing the required reserve ratio

• buying government securities in open market operation

Acting to establish an effective monetary policy and acting as a banker to the commercial bank are two basic function of ......

• commercial banks

• central banks

• clearing houses

• merchant banks

The goal of expansionary monetary policy is

• to have an equal distribution of income

• to decrease interest rates

• to decrease price levels

• to increase the level of aggregate output

When bonds price rise, which of the following falls

• stock price

• money demand

• interest rate

• money supply

The price tag of toy bear is RM95. This is an example of the function of money as a

• store of account

• unit of account

• medium of exchange

• standard of deferred payment

............ is the ease which an asset can be converted into cash, differentiates M1 and M2

• liquidity

• Divisibility

• Portability

• Storability

The basic function of ....... include accepting deposits from individuals and firms and providing loans to the public

• a commercial bank

• bank negara malaysia

• an insurance company

• all of the above

Which of the following determines the amount a bank can lend to its customer

• non performing loans

• required reserve

• excess reserve

• none of the above

if the required cash ratio is 10% and a commercial bank has RM1 million in checkable deposits appearing on the liability side of its balance sheet, how much cash reserve does the bank have

• rm1 million

• rm100,000

• rm10,000

• cannot be determine

the demand for money varies ......... with ...........

• directly; the rate of interest

• indirectly ; the rate of interest

• directly ; the level of national income

• indirectlu ; the level of national income