Which of the following statements is correct? O Central bank laws should always stipulate whether the fiscal agency function is performed against a fee or for free. In the absence of a clear rule in the central bank law, the Ministry of Finance and central bank may contractually agree on cost and fee recovery. O In the absence of a clear rule in the central bank law, the fiscal agency function is presumed to be performed against a fee. In the absence of a clear rule in the central bank law, the fiscal agency function is presumed to be a free service..

Which of the following statements is correct? O Central bank laws should always stipulate whether the fiscal agency function is performed against a fee or for free. In the absence of a clear rule in the central bank law, the Ministry of Finance and central bank may contractually agree on cost and fee recovery. O In the absence of a clear rule in the central bank law, the fiscal agency function is presumed to be performed against a fee. In the absence of a clear rule in the central bank law, the fiscal agency function is presumed to be a free service..

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Which of the following statements is
correct?
Central bank laws should
always stipulate whether
the fiscal agency function
is performed against a fee
or for free.
O In the absence of a clear
rule in the central bank law,
the Ministry of Finance and
central bank may
contractually agree on cost
and fee recovery.
In the absence of a clear
rule in the central bank law,
the fiscal agency function
is presumed to be
performed against a fee.
In the absence of a clear
rule in the central bank law,
the fiscal agency function
is presumed to be a free
service..

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For all the questions below select the appropriate answer: a) An open market purchase by the Bank of Canada would result in: O a fall in the excess reserves held by commercial banks. a rise in the bank rate. O an increase in commercial bank reserves and an expansion of bank lending and deposits. a fall in the money supply as commercial banks reduced their loans and deposits. b) When a central bank sets an inflation rate target as the primary goal of monetary policy: O it must also set a fixed exchange rate target that is independent of its inflation target. it must also set a money supply target that is independent of its inflation target. O it must also accept the money supply, exchange and interest rate consistent with its inflation target. it must accept and support the government budget target set by the Minister of Finance. c) The Bank of Canada would use an SPRA when: a temporary excess supply of monetary base puts downward pressure on the avemight interest rate. a temporary…
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For all the questions below select the appropriate answer a) An open market purchase by the Bank of Canada would result in O a fall in the excess reserves held by commercial banks O a rise in the bank rate O an increase in commercial bank reserves and an expansion of bank lending and deposits. a fall in the money supply as commercial banks reduced their loans and deposits. b) When a central bank sets an inflation rate target as the primary goal of monetary policy: O it must also set a fixed exchange rate target that is independent of its inflation target. O it must also set a money supply target that is independent of its inflation target. O it must also accept the money supply, exchange and interest rate consistent with its inflation target O it must accept and support the govemment budget target set by the Minister of Finance. c) The Bank of Canada would use an SPRA when: O a temporary excess supply of monetary base puts downward pressure on the overnight interest rate. O a temporary…
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