If Central Banks Could Not Create Money, Developing Countries

question 12

Multiple Choice

If central banks could not create money, developing countries:

• A)could still finance their expenditures by simply raising taxes.
• B)could still finance their expenditures by issuing bonds.
• C)would find it very difficult to finance their current expenditures.
• D)could not finance any of their expenditures.

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Definitions:

Conditional Sales Agreement

A sales contract in which the buyer takes possession of the item immediately but does not gain ownership until the full price is paid.

Equity Of Redemption

The equitable right of a mortgagor to acquire the title to the mortgaged property by payment of the debt secured by the mortgage.

Arrears

A state of being behind in fulfilling obligations, such as payments on a loan, rent, or utilities.

Purchaser

An individual or entity that buys goods or services from a seller.