Exam 14: Money and Banking

Gizmo Sprockets is a distributor of home appliance parts. Having been in business for more than ten years, it now has contracts with thousands of retailers and repair shops throughout the country. The CEO wants Gizmo to go international, opening some locations in large economies such Brazil and India. He thinks that since the principles of how people do business in a free market are essentially the same anywhere, the expansion of Gizmo's business into other countries should be fairly straightforward. In other words, because the company has been successful in Canada, it will also be successful in international markets. Gizmo's marketing director argues that because the global economy is interconnected, if Gizmo continues to be profitable in Canada, it should be able to invest that money to do well internationally. Which of the following, if true, would most weaken her argument?

Geoff works for a company that buys accounts receivables from a firm for less than face value, but collects the face value of the accounts. Geoff works for a

The United Nations agency that provides a limited scope of financial services, such as funding national improvements in developing countries is the

Which of the following is not part of the M-2 money supply?

Which of the following influences the value of money?

The Bank of Canada plays an important role in managing the money supply in Canada.

The principal source of short-term loans for business firms is

StarMart is a retail chain with more than 120 stores spread across the country. The company is keen to enter into a co-branding agreement with Axiom Financial Services. Under this agreement, StarMart's customers will be provided with an Axiom-Star credit card entitling them to reward points every time they swipe their credit cards at StarMart. Cardholders will be able to redeem points for special discounts, free merchandise, and exclusive services. StarMart is planning on a targeted direct marketing campaign using StarMart's knowledge of consumer buying patterns and Axiom's access to financial information. A senior manager argues that the negative perception associated with mounting credit card debt will affect StarMart. Which of the following would be the most effective measure StarMart could take to address this potential problem?

The prime rate of interest is the lowest rate charged to a bank's best customers.

The main function of financial institutions is to

What is a debit card?

What is a demand deposit?

As of January 2015, the value of M-2 was

Describe the changes that have taken place in banking as a result of deregulation.

Which of the following is not part of the M-1 supply?

What do venture capital firms do?

Since a cow is large, bulky, and hard to handle, it fails to meet the money criterion of being

Canadian chartered banks have to maintain a reserve requirement with the Bank of Canada.

The bank rate is the lowest rate a chartered bank charges to its borrowers.

Canada has a ________ banking system.