When the actions of a central bank induce actions from other banks in the country
A) the other banks are reacting to an announcement effect.
B) the other banks are concerned about a penalty rate.
C) the other banks are acting to prevent liquidity problems.
D) the other banks are acting as fiscal agents.
Question 2 - In understanding the differences of the impact of globalization on inflation in various nations it is important to consider
A) the degree of development in a nation.
B) the structure of income taxes in the country.
C) the degree of central bank independence.
D) all of the above.
Question 3 - When an economist considers welfare evaluations, he is looking at
A) whether a policy increases social welfare.
B) the ability of an economy to take care of the unemployed.
C) price inertia.
D) new open economy macroeconomics.
Question 4 - A lender of the last resort refers to
A) a role of the central bank to prevent bank runs for temporary problems of liquidity.
B) a role for the government to ensure that the central bank has adequate reserves.
C) a reason for regulating banks.
D) the need for market based regulations in the banking industry.
Question 5 - If a firm operates in a imperfectly competitive market, it may be able to price its products in local currencies above world prices for their goods. This is called
A) pricing to market.
B) trade war.
C) trade stickiness.
D) price gauging.
Question 6 - What roles do central banks play in an economy?
A) Central banks are government depositories.
B) Central banks lobby for regulation on behalf of the banking industry.
C) Central banks monitor fiscal agents in the economy.
D) none of the above
Question 7 - The small but non-trivial costs that a firms incurs when changes product prices are also called
A) menu costs.
B) price inertia.
C) sticky costs.
D) sunk costs.
Question 8 - Which of the following is a central bank asset?
A) domestic securities and bills
B) currency notes
C) bank reserve deposits
D) government deposits
Question 9 - When the short term adjustment of a nation's price level is sluggish, economists will often discuss the nation's
A) price inertia.
B) policy assignment.
C) trade restrictions.
D) central bank independence.
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