When Zimbabwe needed to finance the war against Congo, the government issued bonds and forced the Central Bank to buy those bonds in exchange for newly-printed Zimbabwean dollars. This action prompted a hyperinflation of almost 100,000 percent. This is an example of a lack of:
A. central bank effectiveness in its monetary policy.
B. central bank economists running the institution.
C. central bank independence.
D. central bank dependence.
Answer: C
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Open market sales shrink ________ thereby lowering ________
A) the money multiplier; the money supply B) the money multiplier; reserves and the monetary base C) reserves and the monetary base; the money supply D) the money base; the money multiplier
When the Fed receives an inflow of Federal Reserve notes, its
A) assets rise. B) liabilities decline. C) liabilities increase. D) assets decline.
A tariff is a tax placed on
a. an exported good and it lowers the domestic price of the good below the world price. b. an exported good and it ensures that the domestic price of the good stays the same as the world price. c. an imported good and it lowers the domestic price of the good below the world price. d. an imported good and it raises the domestic price of the good above the world price.
The real interest rate is defined as the:
a. fixed rate on consumer loans. b. nominal interest rate minus the inflation rate. c. actual interest rate. d. expected interest rate minus the inflation rate.