The Two Policy Tools the Reserve Bank Uses to Influence

question 84

Multiple Choice

The two policy tools the Reserve Bank uses to influence the interest rate and regulate the amount of money circulating in the economy are

• A) setting the cash rate and the market interest rate.
• B) credit easing and setting the required reserve ratio.
• C) open market operations and setting the cash rate.
• D) open market operations and setting tax rates.
• E) open market operations and setting the excess reserve ratio.

Determine the effects of buying and selling assets on a company's financial position.

Assess the profitability of a company through the analysis of income, expenses, and net income.

Prepare basic financial statements, including income statements, balance sheets, and statements of owner's equity.

Identify the types of transactions that influence owner's equity.

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Definitions:

Stock Appreciation Rights

A type of incentive or compensation mechanism provided to employees that gives the right to receive a bonus equivalent to the increase in the company’s stock price over a set period.

Compensatory

Refers to something intended to recompense or make up for a loss, injury, or inconvenience.

Stock Option Plan

A compensation strategy businesses use to grant employees the option to purchase company stock at a discounted price in the future.

Market Price

Market Price is the current price at which an asset or service can be bought or sold in a given market.