POSSIBLE QUESTIONS ON BAF 311

[MONETARY THEORY AND POLICY]

[First Semester]
By: DIST. SEN. EZENNAYA FELIX [FEMZI]

1. ---------------- is the maximum amount of money a lender will allow

you to spend on a credit card or a line of credit.
2. ------------------- are the minimum reserves required for depository
institutions. They are set by the central bank within limits specified
by laws for depository institutions.
3. --------------- is maintained through actions such as increasing the
interest rate, or changing the amount of money banks need to keep in
the vault (bank reserves).
4. Monetary policy aims at influencing the economic activity in the
economy mainly through two major variables. What are they?
5. Why has full employment been ranked among the foremost
objectives of macroeconomic goal
6. ------------ is a situation in which everybody who wants to work
gets work.
7. To achieve full employment, Keynes advocated increase in ---------
to bring about reduction in real wages.
8. Why does both economists and laymen favour this price stability
9. ---------------- is measured by the increase in the amount of goods
and services in each successive time period.
10. There are three target variables for monetary policy. They are ---
------------, ------------------ and ------------------
11. What does economists call “availability of credit, and interest
rates”
12. What are the formal way of measuring the total sum/stock of
money in a country
13. -------------- involves management of money supply and interest
rate and is the demand side economic policy used by the government
of a country to achieve macroeconomic objectives like inflation,
consumption, growth and liquidity
14. ------------ deals with how central bank carries out monetary
policy
15. Monetary targeting occurs in two forms. They are ----------------
and ------------
16. What year was open market operations formed
17. The actions of a central bank currency board or other regulatory
committees that determine the size and rate of growth of the money
supply affects -----------------
18. The Keynesian concept of full employment involves -------
conditions
19. What is the first difficulties in pursuing a policy of stable price
level
20. ------------ is a desire goal for a country
21. The economy may not grow further if there is no improvement in
-------------- in keeping with the new technologies.
22. The resources available to national monetary authorities to
finance potential balance of payments deficits are ----------
23. Deficit in the balance of payment will retard the attainment of
other goals
24. An unexpected increase in inflation initially reduces ------------
25. --------------- is a country's official, paper currency that is
circulated for the transactions involved in acquiring goods and
services
26. ----------------- is a category of money supply that includes all
physical money such as coins and currency, demand deposits, and
other liquid assets held by the central bank
27. ------------ is a medium of exchange utilized as an alternative to
hard currency
28. --------------- is a technical term for any demand deposit account
against which checks or drafts of any kind may be written
29. ------------- account simply mean account from which deposited
funds can be withdrawn
30. ------------- is a kind of mutual fund that invests in highly liquid,
near-term instruments. These instruments include cash, cash
equivalent securities
31. ------------------ is money pooled from many investors, and invested
in securities such as stocks, bonds, and short-term debt by a company
32. ------------- means loss of control over the interest
33. ------------- means loss of control over the money supply

ANSWER
1. Credit Restriction/Credit Limit
2. Reserve Requirements
3. Monetary Policy
4. Money/Credit Supply and the Rate of Interest
5. Because of the loss of social standing and self-respect.
6. Full Employment [By Keynes]
7. Effective Demand
8. Because fluctuations in prices bring uncertainty and instability to
the economy.
9. Economic Growth
10. The money supply, availability of credit, and interest rates
11. Money market conditions' which refers to short-term interest
rates
12. Monetary Aggregates
13. Monetary Policy/Regime
14. Monetary Policy Strategies
15. The rigid Friedman-type monetary and the flexible variety
16. June 30 [1993] by CBN
17. Interest Rates
18. Three[3], they are;
Reduction in the real wage rate
Increase in effective demand
Inelastic supply of output at the level of full employment
19. The type of price level to be stabilized
20. Economic Growth
21. The quality of labour
22. International Liquidity
23. Unemployment
24. Interest Rates
25. Paper Money
26. Narrow Money
27. Traveler's Cheque
28. Checkable Deposits
29. Demand Deposit
30. Money Market Instrument Shares
31. Mutual Fund
32. Money Supply Target
33. Interest Rate Target
As you write this exam, I pray you will succeed and may all
your efforts towards reading and preparation not be in vain.

My Special Appreciation goes to GOD Almighty and also to

my parents who gave me this opportunity to study in this
prestigious school

Exam Success!!! Exam Success!!! Exam Success!!!

Feel free to call/chat SEN. EZENNAYA FELIX

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