RIFT VALLEY UNIVERSITY DAMBI DOLLO CAMPUS COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT ECONOMICS MONETARY ECONOMICS FINAL EXAM FOR 4TH YEAR WEEKEND STUDENTS.
MAXIMUM MARK 30%. Time allowed 40 minutes
Name:__________________________________________Id.no.___________ section________
PART I: WRITE TRUE OR FALSE DEPENDS ON YOUR GIVEN QUESTION (2pt ).
_________1. According to quantity theory of money interest rate have no effect on the demand for
money.
_________2 . Bonds are those asset which yield a perpetual income stream of constant nominal
income. _________3.
Banks are government agencies that oversees banking system _________4 . The
purchase of bond by the central bank is provide through discount rate. _________5 . All functions
of central bank are exists in commercial banks . _________6 . The most important
player's in financial markets through the world are borrower from the banks.
________ 7 . The use of central bank to control money supply is monetary policy
PARTE II : CHOOSE THE CORRECT ANSWER (2 pt)
________ 8. ____________ is the rate of turn over of money
A. Velocity of money. C. Money supply
B. Quantity theory of money. D. Money demand
________ 9. The motive of holding money to carry out a regular and planned transaction is called A.
Precautionary motive. B. Speculative motive. C. Transaction motive D. None
_________10. _______________ tell us how much the money supply changes for a given change in a
monetary base. A.
Money multiplier. B. Money supply. C. Central Bank D. Depositors
________11. From below statement which one is odd. A.
Open market operations. B. Reserve requirement. C. Interest rate D. Discount rat
________12 . Which one is not the actions of central bank?
A. Affect interest rate. B. Affect the amount of credit. C. Affect money supply D. None.
______13. Which one is not the functions of commercial banks?
A. Monopoly on the issues of bank notes. B. Government banker.
C.Manage the country foreign exchange. D. The bankers bank. E. All
PART III : GIVE SHORT ANSWER
14. Briefly discuss the players of money supply
15. Write the goals of monetary policy
