Which of the following is a tightening monetary policy ( ). A: Central bank raises the rediscount rate B: Increase the money supply C: The central bank conducts reverse repo operations on the open market D: Central bank reduces the rediscount rate

Which of the following is NOT a way in which a central bank can conduct its monetary policy? A: by establishing target interest rates and then undertaking open market operations to maintain them B: by buying and selling government bonds C: by making small policy changes and readjusting policies as needed D: by changing the rate of capital accumulation to influence aggregate supply E: by changing interest rates to influence spending on durable goods and investment

The ability<br/>of a commercial bank to create credit depends on which TWO of the<br/>following? A: The size of<br/>the bank's deposits in its account at the central bank. B: The amount<br/>of cash and liquid assets held by the bank. C: The<br/>willingness of the central bank to sell bonds to the bank. D: The ratio<br/>between the bank's assets and its liabilities. E: The<br/>required ratio of liquid assets to total assets.

In the short run, a central bank can most easily stimulate economic activity by A: selling government bonds to the public B: raising interest rates to make investments more profitable C: lowering the inflation rate though monetary restriction D: influencing aggregate supply through monetary expansion E: influencing aggregate demand and accepting a higher price level in the future

9,Authorities also use a third option called open market operations to _______ or contract the money supply in the country’s banking system. It involves buying and selling of government securities like bonds or foreign currencies in the open market.