(A) remain constant; (B) decreased

(A) fall ; (B) held constant

(A) rise; (B) held constant

(A) fall; (B) decreased

The sum of currency in circulation and commercial bank reserves

The sum of currency in circulation and the currency held by commercial banks

The sum of gold and foreign exchange held by the central bank

The sum of real assets of the banking sector plus its net worth.

(A) lowers (B) underlying trend rate of potential GDP growth

(A) lowers (B) difference between the actual inflation rate and the bank’s target inflation rate.

(A) raises (B) underlying trend rate of potential GDP growth.

(A) raises (B) difference between the actual inflation rate and the bank’s target inflation rate.

The possibility of running out of bank reserves so that the central bank itself becomes insolvent.

Bankers will reduce their reserves if the risk of a run on the bank has been reduced by the central bank’s policy to serve as lender-of-last-resort

The central bank will begin to compete with private banks in lending to households and businesses

The provision of banks with liquidity that can be relied on in a time of crisis creates an incentive for banks to take on excessive risk in their investment strategies, making even greater future demands on the lender-of-last resort more likely than before

there is an excess supply of goods equal to YY

desired demand (YC) is lower than output (YB) and inventories of unsold goods will accumulate.

desired demand (DD) will shift vertically upward to pass through point B for goods market equilibrium

The government budget will be in surplus and equal to BC