Question 1

If the aggregate price level at time t is denoted by Pt,the inflation rate from time t - 1 to t is defined as

Accepted Answer

A)  $ \pi_{t}=\left(P_{t}-P_{t}-1\right) / P_{t}-1 $ 
B)  $ \pi_{\mathrm{t}}=\left(\mathrm{P}_{\mathrm{t}}+1-\mathrm{P}_{\mathrm{t}-1}\right) / \mathrm{P}_{\mathrm{t}-1} $ 
C)  $ \pi_{t}=\left(P_{t}+1-P_{t}\right) / P_{t} $ 
D)  $ \pi_{t}=\left(P_{t}-P_{t-1}\right) / P_{t} $ 
A)  $ \pi_{t}=\left(P_{t}-P_{t}-1\right) / P_{t}-1 $ 
B)  $ \pi_{\mathrm{t}}=\left(\mathrm{P}_{\mathrm{t}}+1-\mathrm{P}_{\mathrm{t}-1}\right) / \mathrm{P}_{\mathrm{t}-1} $ 
C)  $ \pi_{t}=\left(P_{t}+1-P_{t}\right) / P_{t} $ 
D)  $ \pi_{t}=\left(P_{t}-P_{t-1}\right) / P_{t} $

Question 2

From 2002-2011,the dollar strengthened in value against other currencies.Who was helped and who was hurt by this strong dollar?

Accepted Answer

Canadian consumers benefitted because im

Question 3

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 4

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

Question 5

A key factor in producing high economic growth is ________.

Accepted Answer

A)  eliminating foreign trade 
B)  well-functioning financial markets 
C)  high interest rates 
D)  stock market volatility 
A)  eliminating foreign trade 
B)  well-functioning financial markets 
C)  high interest rates 
D)  stock market volatility

Question 6

The S&P/TSX Composite reached a peak of over 14,000 in both ________.

Accepted Answer

A)  2000 and 2002 
B)  2002 and 2005 
C)  2008 and 2011 
D)  2002 and 2011 
A)  2000 and 2002 
B)  2002 and 2005 
C)  2008 and 2011 
D)  2002 and 2011

Question 7

If ten years ago the prices of the items bought last month by the average consumer would have been much lower,then one can likely conclude that ________.

Accepted Answer

A)  the aggregate price level has declined during this ten-year period 
B)  the average inflation rate for this ten-year period has been positive 
C)  the average rate of money growth for this ten-year period has been positive 
D)  the aggregate price level has risen during this ten-year period 
A)  the aggregate price level has declined during this ten-year period 
B)  the average inflation rate for this ten-year period has been positive 
C)  the average rate of money growth for this ten-year period has been positive 
D)  the aggregate price level has risen during this ten-year period

Question 8

The cost of borrowing is commonly referred to as the ________.

Accepted Answer

A)  inflation rate 
B)  exchange rate 
C)  interest rate 
D)  aggregate price level 
A)  inflation rate 
B)  exchange rate 
C)  interest rate 
D)  aggregate price level

Question 9

High interest rates might ________ purchasing a house or car but at the same time high interest rates might ________ saving.

Accepted Answer

A)  discourage; encourage 
B)  discourage; discourage 
C)  encourage; encourage 
D)  encourage; discourage 
A)  discourage; encourage 
B)  discourage; discourage 
C)  encourage; encourage 
D)  encourage; discourage

Question 10

Stock prices are ________.

Accepted Answer

A)  relatively stable trending upward at a steady pace 
B)  relatively stable trending downward at a moderate rate 
C)  extremely volatile 
D)  unstable trending downward at a moderate rate 
A)  relatively stable trending upward at a steady pace 
B)  relatively stable trending downward at a moderate rate 
C)  extremely volatile 
D)  unstable trending downward at a moderate rate

Question 11

Which of the following is most likely to result from a stronger Canadian dollar?

Accepted Answer

A)  Canadian goods exported aboard will cost less in foreign countries, and so foreigners will buy more of them. 
B)  Canadian goods exported aboard will cost more in foreign countries and so foreigners will buy more of them. 
C)  Canadian goods exported abroad will cost more in foreign countries, and so foreigners will buy fewer of them. 
D)  Canadians will purchase fewer foreign goods. 
A)  Canadian goods exported aboard will cost less in foreign countries, and so foreigners will buy more of them. 
B)  Canadian goods exported aboard will cost more in foreign countries and so foreigners will buy more of them. 
C)  Canadian goods exported abroad will cost more in foreign countries, and so foreigners will buy fewer of them. 
D)  Canadians will purchase fewer foreign goods.

Question 12

Money is defined as ________.

Accepted Answer

A)  bills of exchange 
B)  anything that is generally accepted in payment for goods and services or in the repayment of debt 
C)  a repository of spending power 
D)  the unrecognized liability of governments 
A)  bills of exchange 
B)  anything that is generally accepted in payment for goods and services or in the repayment of debt 
C)  a repository of spending power 
D)  the unrecognized liability of governments

Question 13

What is measured by the Gross Domestic Product (GDP)? what is included and what is excluded in the calculation of GDP?

Accepted Answer

GDP is the most commonly used measure of

Question 14

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 15

A ________ is an example of a security,which is a claim on future income or ________.

Accepted Answer

A)  bond; interest rate 
B)  bond; debt 
C)  stock; assets 
D)  stock; debt 
A)  bond; interest rate 
B)  bond; debt 
C)  stock; assets 
D)  stock; debt

Question 16

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 17

Sustained downward movements in the business cycle are referred to as ________.

Accepted Answer

A)  inflation 
B)  recessions 
C)  economic recoveries 
D)  expansions 
A)  inflation 
B)  recessions 
C)  economic recoveries 
D)  expansions

Question 18

A security is also known as ________.

Accepted Answer

A)  a financial instrument 
B)  a contingent claim 
C)  the interest rate 
D)  a liability 
A)  a financial instrument 
B)  a contingent claim 
C)  the interest rate 
D)  a liability

Question 19

Changes in stock prices ________.

Accepted Answer

A)  do not affect people's wealth and their willingness to spend 
B)  affect firms' decisions to sell stock to finance investment spending 
C)  are predictable 
D)  are unimportant to decision makers 
A)  do not affect people's wealth and their willingness to spend 
B)  affect firms' decisions to sell stock to finance investment spending 
C)  are predictable 
D)  are unimportant to decision makers

Question 20

In the 1970s,in Canada,interest rates trended upward.During this same time period,

Accepted Answer

A)  the rate of money growth declined 
B)  the rate of money growth increased 
C)  the government budget deficit (expressed as a percentage of GNP) trended downward 
D)  inflation fell 
A)  the rate of money growth declined 
B)  the rate of money growth increased 
C)  the government budget deficit (expressed as a percentage of GNP) trended downward 
D)  inflation fell

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

If the aggregate price level at time t is denoted by Pt,the inflation rate from time t - 1 to t is defined as

From 2002-2011,the dollar strengthened in value against other currencies.Who was helped and who was hurt by this strong dollar?

Banks ________.

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

A key factor in producing high economic growth is ________.

The S&P/TSX Composite reached a peak of over 14,000 in both ________.

If ten years ago the prices of the items bought last month by the average consumer would have been much lower,then one can likely conclude that ________.

The cost of borrowing is commonly referred to as the ________.

High interest rates might ________ purchasing a house or car but at the same time high interest rates might ________ saving.

Stock prices are ________.

Which of the following is most likely to result from a stronger Canadian dollar?

Money is defined as ________.

What is measured by the Gross Domestic Product (GDP)? what is included and what is excluded in the calculation of GDP?

The foreign exchange rate is ________.

A ________ is an example of a security,which is a claim on future income or ________.

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

Sustained downward movements in the business cycle are referred to as ________.

A security is also known as ________.

Changes in stock prices ________.

In the 1970s,in Canada,interest rates trended upward.During this same time period,

An Overview of the Financial System

What Is Money

Understanding 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

Financial Crises

Economic Analysis of Financial Regulation

Banking Industry: Structure and Competition

Nonbank Finance

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

The ISLM Model

Filters

High interest rates might purchasing a house or car but at the same time high interest rates might saving.

A is an example of a security,which is a claim on future income or .

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