Question 1

What is a stock? How do stocks affect the economy?

Accepted Answer

A stock represents a share of ownership

Question 2

During a recession, output declines resulting in ________.

Accepted Answer

A)  lower unemployment in the economy 
B)  higher unemployment in the economy 
C)  no impact on the unemployment in the economy 
D)  higher wages for the workers 
A)  lower unemployment in the economy 
B)  higher unemployment in the economy 
C)  no impact on the unemployment in the economy 
D)  higher wages for the workers

Question 3

Nominal GDP is output measured in ________ prices while real GDP is output measured in ________ prices.

Accepted Answer

A)  current; current 
B)  current; fixed 
C)  fixed; fixed 
D)  fixed; current 
A)  current; current 
B)  current; fixed 
C)  fixed; fixed 
D)  fixed; current

Question 4

The stock market is important because it is ________.

Accepted Answer

A)  where interest rates are determined 
B)  the most widely followed financial market in the Canada 
C)  where foreign exchange rates are determined 
D)  the market where most borrowers get their funds 
A)  where interest rates are determined 
B)  the most widely followed financial market in the Canada 
C)  where foreign exchange rates are determined 
D)  the market where most borrowers get their funds

Question 5

If the CPI is 120 in 2002 and 180 in 2012, then between 2002 and 2012, prices have increased by ________.

Accepted Answer

A)  180 percent 
B)  80 percent 
C)  60 percent 
D)  50 percent 
A)  180 percent 
B)  80 percent 
C)  60 percent 
D)  50 percent

Question 6

Banks ________.

Accepted Answer

A)  are the smallest of the financial intermediaries 
B)  are the largest financial intermediaries 
C)  are barred from providing financial intermediation services 
D)  can only provide services to corporations 
A)  are the smallest of the financial intermediaries 
B)  are the largest financial intermediaries 
C)  are barred from providing financial intermediation services 
D)  can only provide services to corporations

Question 7

Financial innovation can lead to ________ and ________.

Accepted Answer

A)  phishing; financial gain 
B)  higher interest rates; higher inflation 
C)  higher profits; financial disasters 
D)  lower interest rates; lower inflation 
A)  phishing; financial gain 
B)  higher interest rates; higher inflation 
C)  higher profits; financial disasters 
D)  lower interest rates; lower inflation

Question 8

Canadian farmers who sell beef to Europe benefit most from ________.

Accepted Answer

A)  a decrease in the Canadian dollar price of euros 
B)  an increase in the Canadian dollar price of euros 
C)  a constant Canadian dollar price for euros 
D)  a European ban on imports of Canadian beef 
A)  a decrease in the Canadian dollar price of euros 
B)  an increase in the Canadian dollar price of euros 
C)  a constant Canadian dollar price for euros 
D)  a European ban on imports of Canadian beef

Question 9

If the CPI in 2012 is 200, and in 2013 the CPI is 180, the rate of inflation from 2012 to 2013 is ________.

Accepted Answer

A)  20 percent 
B)  10 percent 
C)  0 percent 
D)  -10 percent 
A)  20 percent 
B)  10 percent 
C)  0 percent 
D)  -10 percent

Question 10

When in 1985 a British pound cost approximately C$1.30, a Shetland sweater that cost 100 British pounds would have cost $130. With a weaker Canadian dollar, the same Shetland sweater would have cost ________.

Accepted Answer

A)  less than $130 
B)  more than $130 
C)  $130, since the exchange rate does not affect the prices that Canadian consumers pay for foreign goods 
D)  $130, since the demand for Shetland sweaters will decrease to prevent an increase in price due to the stronger dollar 
A)  less than $130 
B)  more than $130 
C)  $130, since the exchange rate does not affect the prices that Canadian consumers pay for foreign goods 
D)  $130, since the demand for Shetland sweaters will decrease to prevent an increase in price due to the stronger dollar

Question 11

The foreign exchange rate is ________.

Accepted Answer

A)  determined by the banks 
B)  not important to Canadian individuals 
C)  the relative price of two currencies 
D)  the ratio of the foreign aggregate price level to the domestic aggregate price level 
A)  determined by the banks 
B)  not important to Canadian individuals 
C)  the relative price of two currencies 
D)  the ratio of the foreign aggregate price level to the domestic aggregate price level

Question 12

Budget deficits are important because deficits ________.

Accepted Answer

A)  cause bank failures 
B)  always cause interest rates to fall 
C)  may lead to a financial crisis 
D)  always cause prices to fall 
A)  cause bank failures 
B)  always cause interest rates to fall 
C)  may lead to a financial crisis 
D)  always cause prices to fall

Question 13

If your nominal income in 2013 was $30000, and prices doubled between 2002 and 2013, to have the same real income, your nominal income in 2002 must be ________.

Accepted Answer

A)  $10000 
B)  $15000 
C)  $20000 
D)  $100,000 
A)  $10000 
B)  $15000 
C)  $20000 
D)  $100,000

Question 14

Everything else held constant, a weaker Canadian dollar will likely hurt ________.

Accepted Answer

A)  textile exporters in Quebec 
B)  wheat farmers in Saskatchewan that sell domestically 
C)  automobile manufacturers in Ontario that use domestically produced inputs 
D)  furniture importers in British Columbia 
A)  textile exporters in Quebec 
B)  wheat farmers in Saskatchewan that sell domestically 
C)  automobile manufacturers in Ontario that use domestically produced inputs 
D)  furniture importers in British Columbia

What is a stock? How do stocks affect the economy?

During a recession, output declines resulting in ________.

Nominal GDP is output measured in prices while real GDP is output measured in prices.

The stock market is important because it is ________.

If the CPI is 120 in 2002 and 180 in 2012, then between 2002 and 2012, prices have increased by ________.

Banks ________.

Financial innovation can lead to and .

Canadian farmers who sell beef to Europe benefit most from ________.

If the CPI in 2012 is 200, and in 2013 the CPI is 180, the rate of inflation from 2012 to 2013 is ________.

When in 1985 a British pound cost approximately C$1.30, a Shetland sweater that cost 100 British pounds would have cost $130. With a weaker Canadian dollar, the same Shetland sweater would have cost ________.

The foreign exchange rate is ________.

Budget deficits are important because deficits ________.

If your nominal income in 2013 was $30000, and prices doubled between 2002 and 2013, to have the same real income, your nominal income in 2002 must be ________.

Everything else held constant, a weaker Canadian dollar will likely hurt ________.

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

Central Banks and the Bank of Canada

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

Exam 1: Why Study Money, Banking, and Financial Markets

What is a stock? How do stocks affect the economy?

During a recession, output declines resulting in ________.

Nominal GDP is output measured in ________ prices while real GDP is output measured in ________ prices.

The stock market is important because it is ________.

If the CPI is 120 in 2002 and 180 in 2012, then between 2002 and 2012, prices have increased by ________.

Banks ________.

Financial innovation can lead to ________ and ________.

Canadian farmers who sell beef to Europe benefit most from ________.

If the CPI in 2012 is 200, and in 2013 the CPI is 180, the rate of inflation from 2012 to 2013 is ________.

When in 1985 a British pound cost approximately C$1.30, a Shetland sweater that cost 100 British pounds would have cost $130. With a weaker Canadian dollar, the same Shetland sweater would have cost ________.

The foreign exchange rate is ________.

Budget deficits are important because deficits ________.

If your nominal income in 2013 was $30000, and prices doubled between 2002 and 2013, to have the same real income, your nominal income in 2002 must be ________.

Everything else held constant, a weaker Canadian dollar will likely hurt ________.

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

Central Banks and the Bank of Canada

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

Nominal GDP is output measured in prices while real GDP is output measured in prices.

Financial innovation can lead to and .