Question 1

Which of the following are entities of the Federal Reserve System?

Accepted Answer

A)  Federal Reserve Banks 
B)  The FDIC 
C)  The Board of Advisors 
D)  Both A and B of the above are Federal Reserve entities 
A)  Federal Reserve Banks 
B)  The FDIC 
C)  The Board of Advisors 
D)  Both A and B of the above are Federal Reserve entities

Question 2

Increased operational independence by the Bank of Canada has also raised the standards for ________.

Accepted Answer

A)  accountability 
B)  secrecy 
C)  misconduct 
D)  confusion 
A)  accountability 
B)  secrecy 
C)  misconduct 
D)  confusion

Question 3

Which of the following functions are not performed by the Bank of Canada in its role as the federal government's fiscal agent?

Accepted Answer

A)  Advising on federal government borrowings 
B)  Managing new debt offerings by the federal government 
C)  Setting interest rates payable on time deposits 
D)  Servicing the federal government's outstanding debt 
A)  Advising on federal government borrowings 
B)  Managing new debt offerings by the federal government 
C)  Setting interest rates payable on time deposits 
D)  Servicing the federal government's outstanding debt

Question 4

Which of the following are entities of the Bank of Canada?

Accepted Answer

A)  The Office of the Superintendent of Financial Institutions (OSFI) 
B)  The Board of Directors 
C)  The Canada Deposit Insurance Corporation (CDI
C)  
D)  The Department of Finance 
A)  The Office of the Superintendent of Financial Institutions (OSFI) 
B)  The Board of Directors 
C)  The Canada Deposit Insurance Corporation (CDI
C)  
D)  The Department of Finance

Question 5

Goal independence is ________.

Accepted Answer

A)  the ability of the central bank to set monetary policy goals 
B)  the ability of the government to set monetary policy goals 
C)  the ability of the prime minister to set monetary policy instruments 
D)  the ability of the government to set monetary policy instruments 
A)  the ability of the central bank to set monetary policy goals 
B)  the ability of the government to set monetary policy goals 
C)  the ability of the prime minister to set monetary policy instruments 
D)  the ability of the government to set monetary policy instruments

Question 6

Because of its unique power to ________ base money,the Bank of Canada can ease the liquidity problems of ________.

Accepted Answer

A)  create; financial institutions 
B)  create; provincial governments 
C)  save; financial institutions 
D)  save; provincial governments 
A)  create; financial institutions 
B)  create; provincial governments 
C)  save; financial institutions 
D)  save; provincial governments

Question 7

According to the performance of the Canadian economy,and the evolution of economic theory,what is the most important goal of monetary policy?

Accepted Answer

A)  Currency stability 
B)  Price stability 
C)  GDP growth 
D)  Employment growth 
A)  Currency stability 
B)  Price stability 
C)  GDP growth 
D)  Employment growth

Question 8

The case for Bank of Canada independence includes the idea that ________.

Accepted Answer

A)  a politically insulated Bank of Canada would be more concerned with long-run objectives and thus be a defender of a sound dollar and a stable price level 
B)  a Bank of Canada under the control of the government might make the so-called political business cycle more pronounced 
C)  the principal-agent problem is perhaps worse for the Bank than for politicians since the former does not answer to the voters on election day 
D)  Only A and B of the above. 
A)  a politically insulated Bank of Canada would be more concerned with long-run objectives and thus be a defender of a sound dollar and a stable price level 
B)  a Bank of Canada under the control of the government might make the so-called political business cycle more pronounced 
C)  the principal-agent problem is perhaps worse for the Bank than for politicians since the former does not answer to the voters on election day 
D)  Only A and B of the above.

Question 9

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)  Both A and B of the above. 
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)  Both A and B of the above.

Question 10

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)  Both A and C of the above. 
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)  Both A and C of the above.

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

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

Question 13

The European Central Bank is located in ________.

Accepted Answer

A)  Frankfurt 
B)  London 
C)  Paris 
D)  Rome 
A)  Frankfurt 
B)  London 
C)  Paris 
D)  Rome

Question 14

The strongest argument for an independent Bank of Canada rests on the view that subjecting the Bank to more political pressures would impart ________.

Accepted Answer

A)  an inflationary bias to monetary policy 
B)  a deflationary bias to monetary policy 
C)  a disinflationary bias to monetary policy 
D)  a countercyclical bias to monetary policy 
A)  an inflationary bias to monetary policy 
B)  a deflationary bias to monetary policy 
C)  a disinflationary bias to monetary policy 
D)  a countercyclical bias to monetary policy

Question 15

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 16

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 17

Economist Stanley Fisher defined two types of independence of central banks: ________ and ________ independence.

Accepted Answer

A)  instrument; goal 
B)  policy; goal 
C)  instrument; political 
D)  parliamentary; decision 
A)  instrument; goal 
B)  policy; goal 
C)  instrument; political 
D)  parliamentary; decision

Question 18

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

Accepted Answer

Although its members have the legal righ

Question 19

Which of the following is a responsibility of the Bank of Canada?

Accepted Answer

A)  Funds management 
B)  Fiscal policy 
C)  Equalization payments 
D)  Foreign policy 
A)  Funds management 
B)  Fiscal policy 
C)  Equalization payments 
D)  Foreign policy

Question 20

The responsibility of monetary policy in Canada was given by the 1967 Bank of Canada Act to the ________.

Accepted Answer

A)  government 
B)  Bank of Canada 
C)  provincial governments 
D)  parliament 
A)  government 
B)  Bank of Canada 
C)  provincial governments 
D)  parliament

Exam 15: Central Banks and the Bank of Canada

Which of the following are entities of the Federal Reserve System?

Increased operational independence by the Bank of Canada has also raised the standards for ________.

Which of the following functions are not performed by the Bank of Canada in its role as the federal government's fiscal agent?

Which of the following are entities of the Bank of Canada?

Goal independence is ________.

Because of its unique power to ________ base money,the Bank of Canada can ease the liquidity problems of ________.

According to the performance of the Canadian economy,and the evolution of economic theory,what is the most important goal of monetary policy?

The case for Bank of Canada independence includes the idea that ________.

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

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

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

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

The European Central Bank is located in ________.

The strongest argument for an independent Bank of Canada rests on the view that subjecting the Bank to more political pressures would impart ________.

The Bank of Canada ultimate objective is ________.

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

Economist Stanley Fisher defined two types of independence of central banks: ________ and ________ independence.

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

Which of the following is a responsibility of the Bank of Canada?

The responsibility of monetary policy in Canada was given by the 1967 Bank of Canada Act to the ________.

Why Study Money, banking, and Financial Markets

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

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

Because of its unique power to base money,the Bank of Canada can ease the liquidity problems of .

Economist Stanley Fisher defined two types of independence of central banks: and independence.