In a Corridor System

question 22

Multiple Choice

In a corridor system

• A)reserves must be sufficiently large.
• B)interest rates are determined by fiscal policy.
• C)the Bank rate determines the overnight interest rate.
• D)the central bank must intervene each day to peg the overnight interest rate.
• E)the interest rate on deposits at the central bank determines the overnight interest rate.

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Definitions:

Competency

It refers to the ability or skill to perform a task successfully or efficiently.

Positive Reinforcement

The addition of a rewarding stimulus following a desired behavior, encouraging its future occurrence.

Negative Reinforcement

A process in behavioral psychology where the removal of an undesirable outcome or stimulus increases the likelihood of a behavior being repeated.

Punishment

The imposition of a penalty as retribution for an offense, with the aim of correcting behavior or serving as a deterrent.