ECONOMICS
INFLATION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Inflationary Measures
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Deflationary Measures
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Contractionary Monetary Policy
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Expansionary Monetary Policy
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Contractionary Fiscal Policy
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Detailed explanation-1: -Increasing the (reserve requirement) ratios reduces the volume of deposits that can be supported by a given level of reserves and, in the absence of other actions, reduces the money stock and raises the cost of credit.
Detailed explanation-2: -Modifying Reserve Requirements By lowering the reserve requirements, banks are able to loan more money, which increases the overall supply of money in the economy.
Detailed explanation-3: -This so-called quantitative easing increases the size of the central bank’s balance sheet and injects new cash into the economy. Banks get additional reserves (the deposits they maintain at the central bank) and the money supply grows.
Detailed explanation-4: -Lower the short-term interest rates. Reduce the reserve requirements. Expand open market operations (buy securities) Stimulation of economic growth. Increased inflation. Currency devaluation. Decreased unemployment. 06-Dec-2022