Unconventional Monetary Policies by a Central Bank Involve

question 52

Multiple Choice

Unconventional monetary policies by a central bank involve

• A) the purchase of long-term government bonds with new money.
• B) the sale of long-term government bonds for foreign exchange.
• C) the purchase of long-term government bonds using foreign exchange.
• D) raising reserve requirements by commercial banks.
• E) selling gold reserves.

---

Definitions:

Bond Discount

The difference between the face value of a bond and the price for which it sells, when the bond's market price is lower than its face value.

Straight-Line Method

A depreciation technique that allocates an equal amount of depreciation each year over the useful life of the asset.

Semiannual Amortization

The process of gradually writing off the initial cost of an asset over a period, with adjustments made twice a year.

Amortization

The gradual reduction of a debt over a period of time through regular payments, which cover interest and principal.