Which of the Following Techniques Adopted by the Central Banks

question 32

Multiple Choice

Which of the following techniques adopted by the central banks around the world have helped them to achieve credibility?

• A)Maintaining a low rate of inflation through tight monetary policies
• B)Publicly announcing a target rate of inflation
• C)Refusing to bail out the commercial banks at times of failure
• D)Supporting all government budget deficits through deficit financing
• E)Reducing unemployment amidst high inflation

Analyze the effects of monetary policy actions on the economy, including those intended to address recessions and inflations.

Recognize the legal and operational framework within which the Federal Reserve operates, including its interactions with commercial banks.

Distinguish between different types of reserves and the reasons banks hold them.

Understand the implications of monetary policy on international trade and exchange rates.

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Definitions:

Recall

The mental process of retrieving information or events from the past without the aid of explicit cues.

Incidental Learning

The retention of information even when it is not required of, or even intended by, the processor.

Explicit Memory Strategies

Techniques used consciously to remember information, including rehearsal, organization, and elaboration.

Phonologically

Pertaining to the system of sounds in a language or the sound structure of words.