Davidson; Management - 3rd Australasian Edition



1.
The monetary base exceeds the money supply.
A. True
B. False


2.
The Reserve Bank of Australia decreases the monetary base whenever it sells government securities.
A. True
B. False


3.
When reserve requirements are increased, interest rates should increase.
A. True
B. False


4.
When the Reserve Bank of Australia sells an asset to the private sector, the monetary base declines.
A. True
B. False


5.
When a bank orders currency from the Reserve Bank of Australia, the monetary base does not change.
A. True
B. False


6.
A significant move by the Fed toward a “tight” money policy is likely to enhance exports.
A. True
B. False


7.
Decreasing interest rates increase financial wealth and encourage consumer spending.
A. True
B. False


8.
An increase in the money supply should ultimately cause security prices to decrease.
A. True
B. False


9.
Restrictive monetary policy in Australia may slow down net exports and GNP.
A. True
B. False


10.
Increasing interest rates increase wealth of spending limits and encourage spending.
A. True
B. False


11.
Unexpected high levels of inflation aid debtors at the expense of lenders.
A. True
B. False


12.
Cash drains decrease the monetary base, but not the money supply.
A. True
B. False


13.
Real investment is encouraged by rising interest rates.
A. True
B. False


14.
The Reserve Bank of Australia is powerless against “technical factors”.
A. True
B. False


15.
High stock prices are a goal of monetary policy.
A. True
B. False


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