Macroeconomics for Public Policy - Quiz The Central Bank of a country * O pays interest on public debt of the sovereign state @ Sets monetary policy Oakes budget of the government O None of the above Which of the following is true? * Ono includes demand deposits O the M1 includes demand and time deposits @ the M1 would be always lower than or equal to M3 O the M3 and M1 will always be equal ONone of the above ‘Precautionary’ Demand for Money depends on * O Interest rate (r) O open Market Operations (OMO) O cre end sik @None of the above If the rate of interest becomes close to zero then * © Economy will grow rapidly O Fiscal policy becomes ineffective @ Monetary policy becomes ineffective O inflation will fall ONbone of the above The use of silver coins as money is an example of * O Fiduciary money O Commodity money @ Fiat money O broad money O None of the above Public's money deposited in a National Savings Certificate (NSC) in a Postal Bank Branch will be * OM1, M2 but not M4 O M1, M2 but not M3 Ot, M3 and M4 @only M4 Oe) None of the above Barter system scores over the money system because it creates * O More uncertainty OMore exchange of goods and ideas O Improved division of labour @®Less uncertainty ONone of the above The ‘Potential’ money multiplier is defined as * Ow O11 -R) O1s(mpstm) ©1/( mpc -mps) O None of the above ‘Speculative’ Demand for Money dependson = * @ Interest rate (r) O Level of Income (Y) O Open Market Operations ORR and SLR OvNone of the above Money muttiplier fails to work in case of * O Deep Recession O Balance sheet problem of Busineses O High NPAs of Banks @Allof the above O None of the Above