If the Output Is Too High,to Achieve the Medium Run

question 26

Multiple Choice

If the output is too high,to achieve the medium run equilibrium,the central bank will

• A)increases policy rate.
• B)reduces policy rate.
• C)increase money supply.
• D)increases inflation rate.

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Definitions:

Bond Issuance Costs

Costs related to issuing bonds and debt securities, such as underwriting fees, legal fees, and registration fees, which are amortized over the life of the bond.

Underwriters

Financial specialists who assess and undertake the risk of another party for a fee, often in the context of issuing insurance policies or investment securities.

Discount

A reduction in the price of goods or services usually to encourage sales or to reward specific groups of customers.

Premium

In finance, a premium refers to the amount by which the price of a financial asset or insurance policy exceeds its intrinsic or face value.