Which of the Following Is an Example of an "Unconventional

question 27

Multiple Choice

Which of the following is an example of an "unconventional monetary policy" by a central bank?

• A) the purchase of specific categories of assets with new money
• B) the sale of long-term government bonds for foreign exchange
• C) the purchase of long-term government bonds using foreign exchange
• D) raising reserve requirements by commercial banks
• E) selling gold reserves

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Definitions:

Built-In Stabilizers

Automatic fiscal mechanisms, such as progressive taxation and welfare payments, that help to moderate the fluctuations of an economy's output without additional legislative action.

Income Tax Collections

The process of collecting taxes imposed on individuals or entities based on their income or profits by the government.

National Income

A measure of the total value of all goods and services produced by a country over a specific time period, often adjusted for inflation and excluding net income from abroad.

Budget Deficit

A situation where a government's expenditures exceed its revenues, resulting in the need to borrow money to cover the shortfall.