Financial Crises in Advanced Economies Might Start from a

question 10

Multiple Choice

Financial crises in advanced economies might start from a

• A)debt deflation.
• B)currency crisis.
• C)mismanagement of financial innovations.
• D)currency mismatch.

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Definitions:

Monetary Policy

Central bank policies aimed at influencing economic activities through controlling interest rates and supply of money.

Reserve Requirement

The Reserve Requirement is a central banking regulation that sets the minimum amount of reserves each bank must hold as a proportion of its deposits, a tool used to control the money supply.

Open Market Operations

Activities by a central bank to buy or sell government securities in the open market to influence the money supply and interest rates.

Reserve Requirement

A regulation set by central banks that specifies the minimum amount of reserves a bank must hold in relation to customer deposits.