Question 1

In its role as provider of central banking services, the Bank of Canada ________.

Accepted Answer

A)  serves as a lender of last resort if a deposit-taking institution faces a liquidity crisis 
B)  plays a central role in Canada's national mortgage system 
C)  is responsible for the government's operating accounts and for managing the government's foreign exchange reserves 
D)  A and C only. 
A)  serves as a lender of last resort if a deposit-taking institution faces a liquidity crisis 
B)  plays a central role in Canada's national mortgage system 
C)  is responsible for the government's operating accounts and for managing the government's foreign exchange reserves 
D)  A and C only.

Question 2

In its role as provider of paper money, the Bank of Canada ________.

Accepted Answer

A)  works closely with private sector partnerships and note-issuing authorities in other countries in order to improve cost-effectiveness, increase the durability of Canadian bank notes, and reduce counterfeiting 
B)  tries to preserve the integrity and safety of Canadian currency in the most economical and efficient manner possible 
C)  None of the above. 
D)  A and B only. 
A)  works closely with private sector partnerships and note-issuing authorities in other countries in order to improve cost-effectiveness, increase the durability of Canadian bank notes, and reduce counterfeiting 
B)  tries to preserve the integrity and safety of Canadian currency in the most economical and efficient manner possible 
C)  None of the above. 
D)  A and B only.

Question 3

The Bank of Canada ultimate objective is ________.

Accepted Answer

A)  price stability 
B)  to keep interest rates low 
C)  economic growth 
D)  low unemployment 
A)  price stability 
B)  to keep interest rates low 
C)  economic growth 
D)  low unemployment

Question 4

The Bank of Canada has regional offices in which of the following cities?

Accepted Answer

A)  Saskatoon 
B)  Edmonton 
C)  Montreal 
D)  Winnipeg 
A)  Saskatoon 
B)  Edmonton 
C)  Montreal 
D)  Winnipeg

Question 5

What is the theory of bureaucratic behavior and how can it be used to explain the behavior of the Bank of Canada?

Accepted Answer

The theory of bureaucratic behavior conc

Question 6

In its role as provider of central banking services, the Bank of Canada holds deposit accounts of the ________.

Accepted Answer

A)  provincial governments 
B)  directly clearing members of the Canadian Payments Association 
C)  international organizations, such as the International Monetary Fund 
D)  B and C only. 
A)  provincial governments 
B)  directly clearing members of the Canadian Payments Association 
C)  international organizations, such as the International Monetary Fund 
D)  B and C only.

Question 7

Which of the following are entities of the Eurosystem?

Accepted Answer

A)  The European Central Bank 
B)  The central banks of the European Union countries that have adopted the euro 
C)  The central banks of the euro area countries and of the European Union countries that have not yet adopted the euro 
D)  A and B only 
A)  The European Central Bank 
B)  The central banks of the European Union countries that have adopted the euro 
C)  The central banks of the euro area countries and of the European Union countries that have not yet adopted the euro 
D)  A and B only

Question 8

Recent research indicates that inflation performance (low inflation) has been found to be best in countries with ________.

Accepted Answer

A)  the most independent central banks 
B)  the least independent central banks 
C)  political control of monetary policy 
D)  a policy of always keeping interest rates low 
A)  the most independent central banks 
B)  the least independent central banks 
C)  political control of monetary policy 
D)  a policy of always keeping interest rates low

Question 9

The Eurosystem has a structure like that of the ________.

Accepted Answer

A)  Bank of Canada 
B)  Federal Reserve System 
C)  Bank of England 
D)  Swiss National Bank 
A)  Bank of Canada 
B)  Federal Reserve System 
C)  Bank of England 
D)  Swiss National Bank

Question 10

The Bank of Canada serves as a lender of last ________ when a deposit-taking financial institution faces a ________ crisis.

Accepted Answer

A)  resort; liquidity 
B)  minute; liquidity 
C)  resort; profitability 
D)  minute; profitability 
A)  resort; liquidity 
B)  minute; liquidity 
C)  resort; profitability 
D)  minute; profitability

Question 11

Describe the function and structure of the board of governors of the federal reserve system.

Accepted Answer

At the head of the federal Reserve Syste

Question 12

Why did the Governing Counsel of the ECB decided to operate by consensus?

Accepted Answer

Although its members have the legal righ

Question 13

According to the authors of your textbook, the Federal Reserve is ________.

Accepted Answer

A)  remarkably free of the political pressures that influence other government agencies 
B)  more responsive to the political pressures that influence other government agencies 
C)  constrained in its policy making by the congressional threat to reduce Fed independence 
D)  A and C only. 
A)  remarkably free of the political pressures that influence other government agencies 
B)  more responsive to the political pressures that influence other government agencies 
C)  constrained in its policy making by the congressional threat to reduce Fed independence 
D)  A and C only.

Question 14

In its role as the federal government's fiscal agent, the Bank of Canada provides debt management services for the federal government such as ________.

Accepted Answer

A)  advising on provincial government borrowings 
B)  managing new debt offerings by the federal government 
C)  servicing the federal government's outstanding debt 
D)  B and C only. 
A)  advising on provincial government borrowings 
B)  managing new debt offerings by the federal government 
C)  servicing the federal government's outstanding debt 
D)  B and C only.

Question 15

What are the main differences between the European system of Central Banks and the Federal Reserve System?

Accepted Answer

Although their structure is similar some

Question 16

The Great Depression contributed to significant changes in Canadian ________.

Accepted Answer

A)  deficits 
B)  monetary policy 
C)  foreign affairs policy 
D)  immigration policy 
A)  deficits 
B)  monetary policy 
C)  foreign affairs policy 
D)  immigration policy

Question 17

Critics of the current system of Bank of Canada independence contend that ________.

Accepted Answer

A)  the current system is undemocratic 
B)  voters have too much say about monetary policy 
C)  the governor has too much control over monetary policy on a day-today basis 
D)  B and C only. 
A)  the current system is undemocratic 
B)  voters have too much say about monetary policy 
C)  the governor has too much control over monetary policy on a day-today basis 
D)  B and C only.

Question 18

Which of the following functions are not performed by the Bank of Canada?

Accepted Answer

A)  Cheque clearing 
B)  Conducting economic research 
C)  Setting interest rates payable on time deposits 
D)  Issuing new currency 
A)  Cheque clearing 
B)  Conducting economic research 
C)  Setting interest rates payable on time deposits 
D)  Issuing new currency

Question 19

According to the author of your textbook, the Federal Reserve is ________.

Accepted Answer

A)  remarkably free of the political pressures that influence other government agencies 
B)  more responsive to the political pressures that influence other government agencies 
C)  probably somewhat constrained in its policy making by the congressional threat to reduce Fed independence 
D)  A and C only. 
A)  remarkably free of the political pressures that influence other government agencies 
B)  more responsive to the political pressures that influence other government agencies 
C)  probably somewhat constrained in its policy making by the congressional threat to reduce Fed independence 
D)  A and C only.

Question 20

The Bank of Canada has regional offices in the following cities, except ________.

Accepted Answer

A)  Toronto 
B)  Vancouver 
C)  Edmonton 
D)  Halifax 
A)  Toronto 
B)  Vancouver 
C)  Edmonton 
D)  Halifax

Exam 14: Central Banks and the Bank of Canada

In its role as provider of central banking services, the Bank of Canada ________.

In its role as provider of paper money, the Bank of Canada ________.

The Bank of Canada ultimate objective is ________.

The Bank of Canada has regional offices in which of the following cities?

What is the theory of bureaucratic behavior and how can it be used to explain the behavior of the Bank of Canada?

In its role as provider of central banking services, the Bank of Canada holds deposit accounts of the ________.

Which of the following are entities of the Eurosystem?

Recent research indicates that inflation performance (low inflation) has been found to be best in countries with ________.

The Eurosystem has a structure like that of the ________.

The Bank of Canada serves as a lender of last ________ when a deposit-taking financial institution faces a ________ crisis.

Describe the function and structure of the board of governors of the federal reserve system.

Why did the Governing Counsel of the ECB decided to operate by consensus?

According to the authors of your textbook, the Federal Reserve is ________.

In its role as the federal government's fiscal agent, the Bank of Canada provides debt management services for the federal government such as ________.

What are the main differences between the European system of Central Banks and the Federal Reserve System?

The Great Depression contributed to significant changes in Canadian ________.

Critics of the current system of Bank of Canada independence contend that ________.

Which of the following functions are not performed by the Bank of Canada?

According to the author of your textbook, the Federal Reserve is ________.

The Bank of Canada has regional offices in the following cities, except ________.

Why Study Money, Banking, and Financial Markets

An Overview of the Financial System

What Is Money

The Meaning of Interest Rates

The Behaviour of Interest Rates

The Risk and Term Structure of Interest Rates

The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis

An Economic Analysis of Financial Structure

Economic Analysis of Financial Regulation

Banking Industry: Structure and Competition

Financial Crises

Banking and the Management of Financial Institutions

Risk Management With Financial Derivatives

The Money Supply Process

Tools of Monetary Policy

The Conduct of Monetary Policy: Strategy and Tactics

The Foreign Exchange Market

The International Financial System

Quantity Theory, Inflation, and the Demand for Money

The Is Curve

The Monetary Policy and Aggregate Demand Curves

Aggregate Demand and Supply Analysis

Monetary Policy Theory

The Role of Expectations in Monetary Policy

Transmission Mechanisms of Monetary Policy

Filters

The Bank of Canada serves as a lender of last when a deposit-taking financial institution faces a crisis.