Question 1

What are the main functions of the Bank of Canada? describe them briefly.

Accepted Answer

The main functions of the Bank of Canada

Question 2

The theory of bureaucratic behaviour suggests that the objective of a bureaucracy is to maximize ________.

Accepted Answer

A)  the public's welfare 
B)  profits 
C)  its own welfare 
D)  conflict with the executive and legislative branches of government 
A)  the public's welfare 
B)  profits 
C)  its own welfare 
D)  conflict with the executive and legislative branches of government

Question 3

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 4

The oldest central bank,having been founded in 1694,is the ________.

Accepted Answer

A)  Bank of England 
B)  Deutsche Bundesbank 
C)  Bank of Japan 
D)  Federal Reserve System 
A)  Bank of England 
B)  Deutsche Bundesbank 
C)  Bank of Japan 
D)  Federal Reserve System

Question 5

Under the current "joint responsibility system," ________.

Accepted Answer

A)  the Bank of Canada does not have considerable autonomy in the conduct of day-to-day monetary policy 
B)  in the event of a serious policy conflict the minister of finance can issue a directive that the Bank of Canada must follow 
C)  the government has no responsibility for the policy being followed by the Bank of Canada 
D)  the Bank of Canada has full responsibility for monetary policy 
A)  the Bank of Canada does not have considerable autonomy in the conduct of day-to-day monetary policy 
B)  in the event of a serious policy conflict the minister of finance can issue a directive that the Bank of Canada must follow 
C)  the government has no responsibility for the policy being followed by the Bank of Canada 
D)  the Bank of Canada has full responsibility for monetary policy

Question 6

Advocates of Bank of Canada independence fear that subjecting the Bank to direct government control would ________.

Accepted Answer

A)  impart an anti-inflationary bias to monetary policy 
B)  force monetary authorities to sacrifice the long-run objective of price stability 
C)  make the so-called political business cycle even more pronounced 
D)  Both B and C of the above. 
A)  impart an anti-inflationary bias to monetary policy 
B)  force monetary authorities to sacrifice the long-run objective of price stability 
C)  make the so-called political business cycle even more pronounced 
D)  Both B and C of the above.

Question 7

The Bank of Canada quarterly Monetary Policy Report is published every ________,________,________ and ________.

Accepted Answer

A)  January; April; July; October 
B)  February; May; August; November 
C)  March; June; September; December 
D)  January; February; August; December 
A)  January; April; July; October 
B)  February; May; August; November 
C)  March; June; September; December 
D)  January; February; August; December

Question 8

The Bank of Japan was founded in ________.

Accepted Answer

A)  1882 
B)  1922 
C)  1932 
D)  1952 
A)  1882 
B)  1922 
C)  1932 
D)  1952

Question 9

The overall responsibility for the operation of the bank of Canada is held by the ________.

Accepted Answer

A)  Board of Directors 
B)  Federal Government 
C)  Ministry of Finance 
D)  Provincial governments 
A)  Board of Directors 
B)  Federal Government 
C)  Ministry of Finance 
D)  Provincial governments

Question 10

The Maastricht Treaty which established the European Central Bank,defined price stability as an inflation rate equal to ________.

Accepted Answer

A)  It did not specify exactly. 
B)  0 percent 
C)  1 percent 
D)  2 percent 
A)  It did not specify exactly. 
B)  0 percent 
C)  1 percent 
D)  2 percent

Question 11

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 12

Under the current "joint responsibility system," ________.

Accepted Answer

A)  the Bank of Canada and the minister of finance consult regularly 
B)  in the event of a serious policy conflict the minister of finance can issue a directive that the Bank of Canada must follow 
C)  the Bank of Canada has full responsibility for monetary policy 
D)  Only A and B of the above. 
A)  the Bank of Canada and the minister of finance consult regularly 
B)  in the event of a serious policy conflict the minister of finance can issue a directive that the Bank of Canada must follow 
C)  the Bank of Canada has full responsibility for monetary policy 
D)  Only A and B of the above.

Question 13

Instrument 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 government to set monetary policy instruments 
D)  the ability of the central bank 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 government to set monetary policy instruments 
D)  the ability of the central bank to set monetary policy instruments

Question 14

Under the current "joint responsibility system," ________.

Accepted Answer

A)  in the event of a serious policy conflict the minister of finance can issue a directive that the Bank of Canada must follow 
B)  the government accepts full responsibility for monetary policy 
C)  the Bank of Canada does not have considerable autonomy in the conduct of day-to-day monetary policy 
D)  Both A and B of the above. 
A)  in the event of a serious policy conflict the minister of finance can issue a directive that the Bank of Canada must follow 
B)  the government accepts full responsibility for monetary policy 
C)  the Bank of Canada does not have considerable autonomy in the conduct of day-to-day monetary policy 
D)  Both A and B of the above.

Question 15

The case for Bank of Canada independence does not include the idea that ________.

Accepted Answer

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

Question 16

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

Question 17

The ability of a central bank to set monetary policy instruments is ________.

Accepted Answer

A)  political independence 
B)  goal independence 
C)  policy independence 
D)  instrument independence 
A)  political independence 
B)  goal independence 
C)  policy independence 
D)  instrument independence

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

Question 20

Which of the following statements about central bank structure and independence are true?

Accepted Answer

A)  In recent years, with the exception of the Bank of England and the Bank of Japan, most countries have reduced the independence of their central banks, subjecting them to greater democratic control. 
B)  Before the Bank of England was granted greater independence, the Federal Reserve was the most independent of the world's central banks. 
C)  Both theory and experience suggest that more independent central banks produce better monetary policy. 
D)  While the European Central Bank is independent, it is not as independent as the Federal Reserve. 
A)  In recent years, with the exception of the Bank of England and the Bank of Japan, most countries have reduced the independence of their central banks, subjecting them to greater democratic control. 
B)  Before the Bank of England was granted greater independence, the Federal Reserve was the most independent of the world's central banks. 
C)  Both theory and experience suggest that more independent central banks produce better monetary policy. 
D)  While the European Central Bank is independent, it is not as independent as the Federal Reserve.

Exam 15: Central Banks and the Bank of Canada

What are the main functions of the Bank of Canada? describe them briefly.

The theory of bureaucratic behaviour suggests that the objective of a bureaucracy is to maximize ________.

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

The oldest central bank,having been founded in 1694,is the ________.

Under the current "joint responsibility system," ________.

Advocates of Bank of Canada independence fear that subjecting the Bank to direct government control would ________.

The Bank of Canada quarterly Monetary Policy Report is published every ________,________,________ and ________.

The Bank of Japan was founded in ________.

The overall responsibility for the operation of the bank of Canada is held by the ________.

The Maastricht Treaty which established the European Central Bank,defined price stability as an inflation rate equal to ________.

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

Under the current "joint responsibility system," ________.

Instrument independence is ________.

Under the current "joint responsibility system," ________.

The case for Bank of Canada independence does not include the idea that ________.

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

The ability of a central bank to set monetary policy instruments is ________.

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

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

Which of the following statements about central bank structure and independence are true?

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

The Bank of Canada quarterly Monetary Policy Report is published every ,, and .