Question

QUESTION 8 (4 Marks) "China's central bank Monday conducted a total of 10 billion yuan (about $1.4 billion) of reverse repos to maintain liquidity in the banking system. The interest rate for the seven-day reverse repos was set at 2 percent, according to the People's Bank of China. The move aims to keep stable liquidity in the banking system, the central bank said. A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future." The area of responsibility that China's central bank is undertaking with the above decision is that of: a) Fiscal policy. b) Service to the government. c) Provision of economic and statistical services. d) Maintaining financial stability. QUESTION 9 (4 Marks) With reference to Question 8 above, the measure of money that will not be immediately affected by the above action by China's central bank is: a) M1 b) M2 c) M3 d) Quasi money QUESTION 10 (4 Marks) With reference to Question 8 above, the policy instrument that China's central bank is making use of here is that of: a) Fiscal policy. b) Open market policy. c) Public debt management. d) Intervention in foreign exchange markets. QUESTION 11 (4 Marks) An economy is at equilibrium output when a) Y = C + I + G + (X-M) b) Y = AD + C + G + (X-M) c) Y = AD + C + I + G + (X-M) d) Y = AD + C + I + G QUESTION 12 (4 Marks) If aggregate demand falls short of current output, it would result in a) business firms will cut production to keep from accumulating inventories. b) business firms will expand production to keep from accumulating inventories. c) business firms will cut production to build up inventories. d) business firms will expand production to build up inventories. QUESTION 13 (4 Marks) Which of the following is least likely to be associated with market failure, and is consequently least likely to require any form of state regulation or intervention? a) Hake fishing off the west coast of South Africa. b) The provision of education services in government schools. c) The provision of education services in private schools. d) The market for fast foods. QUESTION 14 (4 Marks) Which one of the following statements is INCORRECT? a) Central government forms part of general government. b) Provincial government forms part of the public sector. c) Local government forms part of general government. d) Public corporations form part of general government. QUESTION 15 (4 Marks) According to Keynesian economists, during a boom in economic activity a) money supply should be increased. b) interest rates should be cut. c) government should increase its spending. d) tax rates should be raised.

          QUESTION 8
(4 Marks)
"China's central bank Monday conducted a total of 10 billion yuan (about $1.4 billion) of reverse repos to maintain liquidity in the banking system.

The interest rate for the seven-day reverse repos was set at 2 percent, according to the People's Bank of China.

The move aims to keep stable liquidity in the banking system, the central bank said.
A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future."

The area of responsibility that China's central bank is undertaking with the above decision is that of:
a) Fiscal policy.
b) Service to the government.
c) Provision of economic and statistical services.
d) Maintaining financial stability.

QUESTION 9
(4 Marks)
With reference to Question 8 above, the measure of money that will not be immediately affected by the above action by China's central bank is:
a) M1
b) M2
c) M3
d) Quasi money

QUESTION 10
(4 Marks)
With reference to Question 8 above, the policy instrument that China's central bank is making use of here is that of:
a) Fiscal policy.
b) Open market policy.
c) Public debt management.
d) Intervention in foreign exchange markets.

QUESTION 11
(4 Marks)
An economy is at equilibrium output when
a) Y = C + I + G + (X-M)
b) Y = AD + C + G + (X-M)
c) Y = AD + C + I + G + (X-M)
d) Y = AD + C + I + G

QUESTION 12
(4 Marks)
If aggregate demand falls short of current output, it would result in
a) business firms will cut production to keep from accumulating inventories.
b) business firms will expand production to keep from accumulating inventories.
c) business firms will cut production to build up inventories.
d) business firms will expand production to build up inventories.

QUESTION 13
(4 Marks)
Which of the following is least likely to be associated with market failure, and is consequently least likely to require any form of state regulation or intervention?
a) Hake fishing off the west coast of South Africa.
b) The provision of education services in government schools.
c) The provision of education services in private schools.
d) The market for fast foods.

QUESTION 14
(4 Marks)
Which one of the following statements is INCORRECT?
a) Central government forms part of general government.
b) Provincial government forms part of the public sector.
c) Local government forms part of general government.
d) Public corporations form part of general government.

QUESTION 15
(4 Marks)
According to Keynesian economists, during a boom in economic activity
a) money supply should be increased.
b) interest rates should be cut.
c) government should increase its spending.
d) tax rates should be raised.

QUESTION 8
(4 Marks)
"China's central bank Monday conducted a total of 10 billion yuan (about 1.4 billion) of reverse repos to maintain liquidity in the banking system.

The interest rate for the seven-day reverse repos was set at 2 percent, according to the People's Bank of China.

The move aims to keep stable liquidity in the banking system, the central bank said.
A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future."

The area of responsibility that China's central bank is undertaking with the above decision is that of:
a) Fiscal policy.
b) Service to the government.
c) Provision of economic and statistical services.
d) Maintaining financial stability.

QUESTION 9
(4 Marks)
With reference to Question 8 above, the measure of money that will not be immediately affected by the above action by China's central bank is:
a) M1
b) M2
c) M3
d) Quasi money

QUESTION 10
(4 Marks)
With reference to Question 8 above, the policy instrument that China's central bank is making use of here is that of:
a) Fiscal policy.
b) Open market policy.
c) Public debt management.
d) Intervention in foreign exchange markets.

QUESTION 11
(4 Marks)
An economy is at equilibrium output when
a) Y = C + I + G + (X-M)
b) Y = AD + C + G + (X-M)
c) Y = AD + C + I + G + (X-M)
d) Y = AD + C + I + G

QUESTION 12
(4 Marks)
If aggregate demand falls short of current output, it would result in
a) business firms will cut production to keep from accumulating inventories.
b) business firms will expand production to keep from accumulating inventories.
c) business firms will cut production to build up inventories.
d) business firms will expand production to build up inventories.

QUESTION 13
(4 Marks)
Which of the following is least likely to be associated with market failure, and is consequently least likely to require any form of state regulation or intervention?
a) Hake fishing off the west coast of South Africa.
b) The provision of education services in government schools.
c) The provision of education services in private schools.
d) The market for fast foods.

QUESTION 14
(4 Marks)
Which one of the following statements is INCORRECT?
a) Central government forms part of general government.
b) Provincial government forms part of the public sector.
c) Local government forms part of general government.
d) Public corporations form part of general government.

QUESTION 15
(4 Marks)
According to Keynesian economists, during a boom in economic activity
a) money supply should be increased.
b) interest rates should be cut.
c) government should increase its spending.
d) tax rates should be raised.

Added by Sabelo H.

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