Choose the correct answer 1.) Which of the following measures would result in an increase in the money supply in the economy? [S1] Sale of government securities to the public by the central bank. [S2] Increase in the expenditure by the government. [S3] Reduction in tax collection by the government. [S4] Purchase of government securities from the public by the central bank. A.) Statement 3 only. B.) Statements 2 and 4 only C.) Statements 1 and 3 only. D.) Statements 2, 3 and 4.
Choose the correct answer
1.) Which of the following measures would result in an increase in the money supply in the economy? [S1] Sale of government securities to the public by the central bank. [S2] Increase in the expenditure by the government. [S3] Reduction in tax collection by the government. [S4] Purchase of government securities from the public by the central bank.
A.) Statement 3 only.
B.) Statements 2 and 4 only
C.) Statements 1 and 3 only.
D.) Statements 2, 3 and 4.
2.) The currency notes in circulation as well as the proportion of the total money supply held in the form of currency are influenced by which of the following? [S1] The trade volume in the economy [S2] The level of prices in the economy [S3] The development of banks and banking habits of the people
A.) Statements 1 and 2 only
B.) Statements 2 and 3 only
C.) Statements 1, 2 and 3
D.) Statement 3 only
3.) What is the most likely effect of financial innovation and increasing real
A.) Increase; Increase.
B.) Increase; Decrease
C.) Decrease; Increase.
D.) Decrease; Decrease
E.) answer not given
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