A Central Bank Can "Create" Money by

question 6

Multiple Choice

A central bank can "create" money by

• A)selling some of its foreign-currency reserves for domestic currency.
• B)selling government Treasury bills to the commercial banks.
• C)increasing the rate of inflation.
• D)issuing its own Central Bank bonds.
• E)purchasing government securities on the open market.

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Definitions:

Stereotype-Consistent

Behaviors or attributes that align with and reinforce widely held beliefs or oversimplified ideas about a particular group of people.

Social Learning Theory

A framework suggesting that people learn new behaviors and attitudes through observation and imitation of others, especially when the behaviors are rewarded.

Characteristic Behavior

Actions or reactions of an individual or group that are typical or expected based on their personality, culture, or social context.

Reinforcement

A process in psychology that increases the likelihood of a behavior by administering a reward or removing a negative outcome after the behavior occurs.