Which of the Following Characteristics of a Central Bank Is

question 25

Multiple Choice

Which of the following characteristics of a central bank is expected to enhance monetary policy credibility?

• A) the central bankers short terms that coincide with the terms of the legislature.
• B) daily central bank actions are subject to the review and veto of the executive branch of the government.
• C) the central bank announces a numerical inflation target.
• D) the central bank is under the obligation to finance the national deficit.

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Definitions:

Accrued Interest

The interest on a loan or bond that has accumulated since the principal investment, or since the last interest payment, if there has been one already.

Using Sinking Fund

The practice of setting aside money over time into a separate account to repay debt or replace a major asset in the future, thus avoiding a large lump-sum expense.

Market Value

Market value is the amount for which something can be sold in a given market at a particular time.

Redemption Value

The price per share a corporation pays to redeem or retire capital stock.