The Act of "Monetary Validation" by a Central Bank Can

question 68

Multiple Choice

The act of "monetary validation" by a central bank can

• A)increase unemployment.
• B)perpetuate inflation.
• C)cause a supply shock.
• D)act to reduce inflation.
• E)no longer be carried out by the Bank of Canada .

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Definitions:

Marginal Social Benefit

The additional gain to society as a whole from consuming or producing one more unit of a good or service.

Marginal Social Cost

The additional cost imposed on society as a whole by producing one extra unit of a good or service.

Nonrival

A good or service that can be consumed by one individual without preventing the consumption of the good by another individual.

Nonexcludable

A characteristic of a public good, indicating that it is not feasible to prevent non-paying customers from consuming the good.