When an Easing of Monetary Policy Is Accomplished by Open-Market

question 16

Multiple Choice

When an easing of monetary policy is accomplished by open-market operations:

• A) interest rates rise.
• B) banks' supplies of funds are increased.
• C) the dollar appreciates.
• D) bank lending generally decreases.

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Definitions:

Maturity Date

The predetermined date on which a financial instrument, such as a loan or bond, is due to be repaid in full.

Promissory Note

A financial instrument that contains a written promise by one party to pay another party a definite sum of money either on demand or at a specified future date.

Due Date

The due date refers to the specific day on which a payment is due or a task must be completed.

Promissory Note

A financial instrument involving a written promise by one party to pay a definite sum of money to another party under specific terms.