Podcast
Questions and Answers
Which tool is described as having an immediate effect on the entire system?
Which tool is described as having an immediate effect on the entire system?
- Open market operation
- Discount rate (correct)
- Expansionary monetary policy
- Reserve requirement
What is the main weakness of the reserve requirement tool?
What is the main weakness of the reserve requirement tool?
- It may cause immediate liquidity problems for banks with low excess reserves (correct)
- It has a slow action for massive effects
- It is rarely used
- It is not very effective if conducted alone
Which tool is described as being suitable to fine-tune market operations and having complete control by BNM?
Which tool is described as being suitable to fine-tune market operations and having complete control by BNM?
- Open market operation (correct)
- Discount rate
- Reserve requirement
- Contractionary monetary policy
What is the primary goal of achieving high employment in the economy?
What is the primary goal of achieving high employment in the economy?
What is the main merit of the discount rate tool?
What is the main merit of the discount rate tool?
Why is it important to achieve price stability in the economy?
Why is it important to achieve price stability in the economy?
Which tool is described as being powerful to fine-tune credit & market conditions but may be too powerful?
Which tool is described as being powerful to fine-tune credit & market conditions but may be too powerful?
What does price stability refer to in the context of the economy?
What does price stability refer to in the context of the economy?
Why do all countries aim to achieve high employment?
Why do all countries aim to achieve high employment?
What does high employment in the economy indicate?
What does high employment in the economy indicate?
What is the main problem associated with inflation according to the text?
What is the main problem associated with inflation according to the text?
How does inflation affect creditors, according to the text?
How does inflation affect creditors, according to the text?
Why is interest-rate stability desirable according to the text?
Why is interest-rate stability desirable according to the text?
What is the objective of converting short-term loans to long-term loans according to the text?
What is the objective of converting short-term loans to long-term loans according to the text?
What is the main goal of monetary policy mentioned in the text?
What is the main goal of monetary policy mentioned in the text?
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