Q1. If the Central Bank increases the minimum reserve ratio that private banks are required to hold, the following will occur: A. The banks can make more loans and the money supply decreases. B. The banks can make more loans and the money supply increases. C. The banks can make fewer loans and the money supply increases. D. The banks can make fewer loans and the money supply decreases. Q2. The monetary base (MB) consists of A) currency in circulation and corporate stocks. B) currency in circulation and corporate liabilities. C) currency in circulation and reserves in banking system. D) reserves and corporate bonds. Q3. The four players in the money supply process include A) banks, depositors, borrowers, and the Ministry of Foreign Affairs. B) banks, depositors, borrowers, and the Council of Representatives. C) banks, depositors, borrowers, and the central bank. D) banks, borrowers, borrowers, and the stock market. Q4. In the figure above, a factor that could cause the demand for bonds to decrease (shift to the left) is: A) an increase in the expected return on bonds relative to other assets. B) a decrease in the expected return on bonds relative to other assets. C) an increase in wealth. D) a reduction in the riskiness of bonds relative to other assets. Q5. The government agency that oversees the banking system and is responsible for the conduct of monetary policy in the Kingdom of Bahrain is A) the Ministry of Economy and Finance. B) the Central Bank of Bahrain. C) the Bahrain stock Exchange D) the National Legislative Body of Bahrain

Q1. If the Central Bank increases the minimum reserve ratio that private banks are required to hold the following will occur: A. The banks can make more loans and the money supply decreases. B. The banks can make more loans and the money supply increases. C. The banks can make fewer loans and the money supply increases. D. The banks can make fewer loans and the money supply decreases. Q2. The monetary base (MB) consists of 2 A) currency in circulation and corporate stocks. B) currency in circulation and corporate liabilities. C) currency in circulation and reserves in banking system. D) reserves and corporate bonds. Q3. The four players in the money supply process include A) banks, depositors, borrowers, and the Ministry of Foreign Affairs. B) banks, depositors, borrowers, and the Council of Representatives. C) banks, depositors, borrowers, and the central bank. D) banks, borrowers, borrowers, and the stock market. Price of Bonds P X P2 B! Quantity of Bonds, B Q4. In the figure above, a factor that could cause the demand for bonds to decrease (shift to the left) is: A) an increase in the expected return on bonds relative to other assets. B) a decrease in the expected return on bonds relative to other assets. C) an increase in wealth. D) a reduction in the riskiness of bonds relative to other assets. Q5. The government agency that oversees the banking system and is responsible for the conduct of monetary policy in the Kingdom of Bahrain is A) the Ministry of Economy and Finance. B) the Central Bank of Bahrain. C) the Bahrain stock Exchange D) the National Legislative Body of Bahrain