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Question No. 1: (5 +5= 10 Marks) Choose the Right answer from the options provided for the following questions: (5marks) ____________ : Setting of the
Question No. 1: (5 +5= 10 Marks)
- Choose the Right answer from the options provided for the following questions: (5marks)
- ____________: Setting of the money supply by policymakers in the central bank.
- Controlling interest rates
- Monetary policy
- Federal Reserve
- Currency
- A _________ person prefers investing in stocks which returns are uncertain.
- Risk-averse
- Risk-manager
- Risk-lover
- None of the above
- A low rate of interest can ________investments?
- discourage
- decrease
- encourage
- None of the above
- Which one is a tool of the Federal Reserve?
- Banking for banks
- Controlling inflation
- Banking for the government
- Selective credit controls
- _________is a promise by a bank to lend the cardholder money with which to make purchases.
- Debit Card
- Money exchange
- E-Money
- None of the above
- Determine whether the sentences are True Or False (5marks)
- Stabilizing the economy is the primary function of Commercial banks ( -------------- )
- The Credit creation activity can raise aggregate demand which leads to more production in the economy ( -------------- )
- Risk aversion is the difference between the return on a risky asset and less risky asset, which serves as compensation for investors to hold riskier securities ( -------------- )
- The transfer of risk occurs in the capital markets ( -------------- )
- The tighter the probability distributions of expected future returns, the higher the risk of a given investment (-------------- ).
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