Which channel of central bank policy does each of the following events or situations represent?
a. Stock prices decline rapidly following an increase in market interest rates.
b. Recent speeches by central bank officials have cautioned the public about an apparently excessive rise in debt-financed spending.
c. Several major corporations were recently denied direct loans by their principal banks.
d. Following a heavy purchase of pounds by the Bank of England that bank moves to offset the domestic effects of the purchase by slightly tightening credit conditions.
e. Concerned about the recent increase in checkable deposits the central bank moves to increase the proportion of legal reserves depository institutions must post behind these deposits.

Question

Which channel of central bank policy does each of the following events or situations represent?
 a. Stock prices decline rapidly following an increase in market interest rates. 
b. Recent speeches by central bank officials have cautioned the public about an apparently excessive rise in debt-financed spending. 
c. Several major corporations were recently denied direct loans by their principal banks.
d. Following a heavy purchase of pounds by the Bank of England that bank moves to offset the domestic effects of the purchase by slightly tightening credit conditions.
e. Concerned about the recent increase in checkable deposits the central bank moves to increase the proportion of legal reserves depository institutions must post behind these deposits.

Quizplus · Accepted Answer

The Answer of Which channel of central bank policy does each of the following events or situations represent?
 a. Stock prices decline rapidly following an increase in market interest rates. 
b. Recent speeches by central bank officials have cautioned the public about an apparently excessive rise in debt-financed spending. 
c. Several major corporations were recently denied direct loans by their principal banks.
d. Following a heavy purchase of pounds by the Bank of England that bank moves to offset the domestic effects of the purchase by slightly tightening credit conditions.
e. Concerned about the recent increase in checkable deposits the central bank moves to increase the proportion of legal reserves depository institutions must post behind these deposits.

Which Channel of Central Bank Policy Does Each of the Following