All of the Following Will Generally Make a Central Bank

question 88

Multiple Choice

All of the following will generally make a central bank increase interest rates,except:

• A) excessive credit growth.
• B) increasing surplus balance of payments.
• C) large changes in price levels.
• D) heavy downward pressure in the foreign exchange.

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Definitions:

Dividends Paid

Payments made by a corporation to its shareholder members, distributing a portion of the company’s earnings.

Net New Borrowing

The total amount of new debt a company has taken on minus any debt that has been repaid during a specific period.

Interest Payments

Payments made to a lender by a borrower in return for the use of borrowed money, typically calculated as a percentage of the principal.

Net New Equity

The difference between equity capital a company raises by issuing new shares and the capital it uses to buy back existing shares.