11. If the Bank of Namibia increases the required reserve ratio from 5% to 10%, the...

11. If the Bank of Namibia increases the required reserve ratio from 5% to 10%, the value of the credit multiplier

(a) increases from 10 to 20

(b) decreases from 10 to 5

(d) increases from 5 to 10

12. Suppose Emerald deposits N$10 000 at Standard Bank. If the reserve requirement is 5%, maximum deposit expansion for the commercial banking system is:

(a) N$200 000

(b) N$205 000

(d) N$100 000

13. The precautionary demand for money is

(a) An idle balance

(b) An active balance

(d) Inversely related to income

14. To counteract a recession, the Bank of Namibia could

(a) increase the Repo rate, increase the required reserve ratio, and sell securities on the open market.

(b) increase the Repo rate, decrease the required reserve ratio, and sell securities on the open market.

(d) decrease the Repo rate, decrease the required reserve ratio, and buy securities on the open market.

15. An expansionary fiscal policy could include:

(a) Lower interest rates

(b) increased lending by the commercial banks

(d) an increase in discretionary government spending.

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

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