The concept of 'Effective Demand' in Keynesian economics determines:
A. Only the money supply
B. Only the price level
C. The level of employment and output
D. Only the interest rate
Answer: Option C
Solution (By JKSSB Mock Tests)
According to Keynes, the level of effective demand (where aggregate demand equals aggregate supply) determines the equilibrium level of employment and output.
Which of the following is a feature of the 'Climate-Related Financial Risks' discussion in central banking?
A.Only physical risks matter and transition risks are irrelevant
B.Central banks have no role in assessing climate risks
C.Physical and transition risks associated with climate change can affect the stability of the financial system and the transmission of monetary policy
D.Climate change is completely irrelevant for financial stability
Explanation:
Climate-related financial risks comprise physical risks (damage from extreme weather) and transition risks (losses from the adjustment to a low-carbon economy); both can impair financial institutions and the broader financial system.
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