1. When the central bank buys €1,000,000 worth of government bonds from the public, the money supply:
- increases by €1,000,000.
- increases by less than €1,000,000.
- increases by more than €1,000,000.
- decreases by €1,000,000.
- does not change.
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Other questions in this quiz
2. The nominal interest rate equals the
- inflation rate times the real interest rate.
- real interest rate divided by the inflation rate.
- real interest rate plus the inflation rate.
- real interest rate minus the inflation rate
- inflation rate minus the real interest rate.
3. The two main responsibilities of the European Central Bank are to _____ and to ______.
- conduct monetary policy; oversee financial markets
- apprehend counterfeiters; regulate the stock market
- collect taxes; pay the government's expenses
- enable banks to make affordable mortgages; control the exchange rate of the Euro
- insure bank deposits; print currency
4. The tendency of changes in asset prices to affect spending on consumption goods is called the _____ effect.
5. The unemployment rate equals the number of people:
- unemployed divided by the labour force.
- unemployed divided by the number employed
- unemployed plus discouraged workers divided by the labour force.
- unemployed plus discouraged workers divided by the number employed.