Q1. i. Central Bank deposits of commercial banks are called High Powered Money or Monetary Base because: A. Is the money that the Central Bank controls B. The deposit that a Central Bank makes in a commercial bank triggers the money creation mechanism through the money multiplier C. Because it is the only reserve in the economy D. Because it is highly liquid
Q1.
i. Central Bank deposits of commercial banks are called High Powered Money or Monetary Base because:
A. Is the money that the Central Bank controls
B. The deposit that a Central Bank makes in a commercial bank triggers the money creation mechanism through the money multiplier
C. Because it is the only reserve in the economy
D. Because it is highly liquid
ii. In descending order of liquidity (from more liquid to less liquid) the proper ordering would be:
A. Real Estate, domestic currency, Treasury bills
B. Treasury bills, domestic currency, Real Estate
C. Domestic currency, Treasury Bills, Real Estate
D. The liquidity ordering is irrelevant, since gold is less liquid than money but is the top reserve asset
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