51. The term “velocity of money” refers to:
a. The speed at which money is printed by the central bank
b. The speed at which money circulates in the economy
c. The speed at which money is deposited in banks
d. The speed at which money is borrowed by the government
52. The term “fractional reserve banking” refers to a system where banks:
a. Hold a fraction of their deposits as reserves and lend out the rest
b. Hold all their deposits as reserves and do not lend them out
c. Borrow money from the central bank to lend to customers
d. Print money to lend to customers
53. Which of the following is a function of the central bank?
a. Determining fiscal policy
b. Regulating the stock market
c. Controlling the money supply
d. Setting exchange rates
54. The term “liquidity preference” refers to:
a. Investors’ preference for liquid assets over illiquid assets
b. Banks’ preference for holding reserves rather than lending
c. The central bank’s preference for a certain level of liquidity in the economy
d. Government’s preference for lower interest rates to stimulate investment
55. The term “discount window” refers to:
a. A market where government bonds are traded at a discount
b. A facility where commercial banks can borrow from the central bank
c. A discount offered by the central bank on interest rates for loans
d. A discount offered by commercial banks on interest rates for customers
