MULTIPLE CHOICE QUESTIONS

3.2 State whether each of the following statements is true. false or uncertain [14] i. ii. iii. 'v'l. vii. viii. ix. xi. xii. xiii. xiv. One of the reasons why some less developed economies grow so slowly is that they do not have well-developed financial markets. Money is only useful for facilitating exchange. Central Bank is not an important nancial intermediary in an economy. Expansionary monetary policy indicates a decrease in the repo rate. When the repo rate increases. ultimately. general price levels will also increase. The independence of the Reserve Bank means that it is unlikely to focus on the long-tenn objectives but seeking short-run solutions. Government monetising the debt and printing money is the same thing. When the rand depreciates. it means its value has increased. In the credit channel of transmission mechanism, an increase in repo rate will have a negative effect on smaller rms. In the monetary policy mandates or goals, the dual mandate is better for a central bank than the hierarchical mandate. Financial intermediaries add extra cost to transaction cost. in order to meet their own costs. thereby increasing the transaction cost. Money has different primary functions in an economy depending on whether it is shells, gold. or paper. 1till-\"here the payments system is heading could influence the way money will be dened in the future. If the bond market becomes more liquid, a customer will be less willing to buy a share of Microsoft stock