Which of the Following Is a Potential Operating Instrument for the Central

question 112

Multiple Choice

Which of the following is a potential operating instrument for the central bank?

• A) The monetary base
• B) The exchange rate
• C) The inflation rate
• D) The bank rate

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Definitions:

Financing Activities

These are transactions involving the flow of cash between a company and its owners and creditors. It includes issuing debt, repaying debt, stock sales, and stock repurchases.

Operating Activities

Activities that relate directly to the primary business operations of an organization, such as sales, provision of services, manufacturing of goods, etc.

Depreciation Expense

The allocation of an asset's cost over its useful life, representing the wear and tear, deterioration, or obsolescence of the asset.

Cash Flows

The total amount of money being transferred into and out of a business, particularly in terms of liquidity and financial planning.