Money, Interest Rates And Output

Which of the following statements about money is not true ?

A. A debit card is not really money because it is only a means of transferring money between accounts
B. All the wealth that people hold, in whatever form, should be considered as money
C. Wealth held in the current account you hold with your bank is almost as convenient for buying things as wealth held in your wallet so the wealth in current accounts should be included in measures of money
D. In a complex economy it is not easy to draw a clear dividing line between assets that should be considered as money and those that should not

The refinancing rate is ?

A. The interest rate at Which commercial banks lend to and borrow from each other
B. The interest rate the European Central Bank pays on reserves
C. The interest rates the public pays when borrowing from banks
D. The interest rates the European Central Bank charges on loans to banks
E. He interests rate banks pay on the public’s deposits

Suppose the central bank purchases a government bond from a person who deposits the entire amount received from the sale in her bank the money supply will ?

A. rise by an amount that depends on the bank’s reserve ratio
B. rise by less than the amount of the deposit
C. fall by exactly the amount of the deposit as long as the bank does not change its reserve ratio
D. fall by exactly the amount of the deposit as long as the bank does not change its reserve ratio
E. be unchanged

Which one of the following is not true ?

A. The difference between the price at which commercial bank sells an asset to the central bank and the price it agrees to buy it back can be expressed as an annualized percentage of the selling price and this is called the refinancing rate
B. Commercial banks may borrow from and lend to each other and the interest rate at which they do this is called the refinancing rate
C. In the UK the refinancing rate is known as the repo rate and in the USA it is referred to as the discount rate.
D. If the central bank has bought some assets from a commercial bank with an agreement that the commercial bank will buy them back at a later date, then this would be called a repo
E. If the central bank raises its refinancing rate then the commercial banks will try to reduce their lending and so reduce the need to borrow from the central bank