Question 1

The prime rate of interest is the rate charged

Accepted Answer

A)  on time deposits. 
B)  on consumer installment loans. 
C)  to major business customers. 
D)  on mortgages. 
E)  to the most risky borrowers. 
A)  on time deposits. 
B)  on consumer installment loans. 
C)  to major business customers. 
D)  on mortgages. 
E)  to the most risky borrowers.

Question 2

What is the prime rate of interest?

Accepted Answer

The lowest

Question 3

What is the largest credit union in Canada (based on annual revenues)?

Accepted Answer

A)  Credit Union Central (Saskatchewan) 
B)  Le Mouvement des Caisses Desjardins 
C)  Vancouver City Savings Credit Union 
D)  B.C.Central Credit Union 
E)  Credit Union Central of Ontario 
A)  Credit Union Central (Saskatchewan) 
B)  Le Mouvement des Caisses Desjardins 
C)  Vancouver City Savings Credit Union 
D)  B.C.Central Credit Union 
E)  Credit Union Central of Ontario

Question 4

Which of the following is a potential problem with ecash?

Accepted Answer

A)  Hackers may break in. 
B)  Regulation and control are virtually non-existent. 
C)  There is no protection like that which covers government-controlled money systems. 
D)  A computer crash could wipe out an account forever. 
E)  All of these are potential problems. 
A)  Hackers may break in. 
B)  Regulation and control are virtually non-existent. 
C)  There is no protection like that which covers government-controlled money systems. 
D)  A computer crash could wipe out an account forever. 
E)  All of these are potential problems.

Question 5

A plastic card that allows an individual to transfer money between bank accounts is a(n)

Accepted Answer

A)  smart card. 
B)  ecard. 
C)  NetCash. 
D)  ecash. 
E)  debit card. 
A)  smart card. 
B)  ecard. 
C)  NetCash. 
D)  ecash. 
E)  debit card.

Question 6

Credit cards are widely used in business transactions but are not included in either M-1 or M-2.

Accepted Answer

A) True 
 B)False

Question 7

The value of money will fluctuate in response to the laws of demand and supply just as the value of a corn crop will fluctuate by the same laws.

Accepted Answer

A) True 
 B)False

Question 8

Retailers like Canadian Tire are not allowed to provide financial service products that compete with those provided by banks.

Accepted Answer

A) True 
 B)False

Question 9

If the reserve requirement were 10 percent,a $100 deposit could result in a ______ increase in new deposits for all banks in the system.

Accepted Answer

A)  $200 
B)  $500 
C)  $1000 
D)  $10 000 
E)  $100 000 
A)  $200 
B)  $500 
C)  $1000 
D)  $10 000 
E)  $100 000

Question 10

In 2011,what proportion of paper money in Canada was counterfeit?

Accepted Answer

A)  5 percent 
B)  10 percent 
C)  1 percent 
D)  3 percent 
E)  less than one-tenth of one percent 
A)  5 percent 
B)  10 percent 
C)  1 percent 
D)  3 percent 
E)  less than one-tenth of one percent

Question 11

Which of the following is not included in either M-1 or M-2?

Accepted Answer

A)  CDs 
B)  Time deposits 
C)  Savings accounts 
D)  Credit cards 
E)  Chequing accounts 
A)  CDs 
B)  Time deposits 
C)  Savings accounts 
D)  Credit cards 
E)  Chequing accounts

Question 12

A demand deposit is

Accepted Answer

A)  the same as a time deposit. 
B)  a chequing account. 
C)  one that remains with the bank for a specified period of time. 
D)  the same as a regular savings account. 
E)  the least important type of money in our economic system. 
A)  the same as a time deposit. 
B)  a chequing account. 
C)  one that remains with the bank for a specified period of time. 
D)  the same as a regular savings account. 
E)  the least important type of money in our economic system.

Question 13

A ________ buys accounts receivables from a firm for less than face value.

Accepted Answer

A)  sales finance company 
B)  credit union 
C)  trust company 
D)  consumer finance company 
E)  factoring company 
A)  sales finance company 
B)  credit union 
C)  trust company 
D)  consumer finance company 
E)  factoring company

Question 14

What term identifies a bank's promise to pay a foreign business firm (e.g.,a German firm)a certain amount if specified conditions are met?

Accepted Answer

A)  Bank loan 
B)  Letter of credit 
C)  Promissory note 
D)  Deposit 
E)  Electronic funds transfer 
A)  Bank loan 
B)  Letter of credit 
C)  Promissory note 
D)  Deposit 
E)  Electronic funds transfer

Question 15

Foreign banks are not allowed to do business in Canada.

Accepted Answer

A) True 
 B)False

Question 16

Jack is one of the bank's most creditworthy customers.The interest rate available to Jack is the

Accepted Answer

A)  reserve requirement rate. 
B)  overnight rate. 
C)  prime rate. 
D)  discount rate. 
E)  rediscount rate. 
A)  reserve requirement rate. 
B)  overnight rate. 
C)  prime rate. 
D)  discount rate. 
E)  rediscount rate.

Question 17

Terri will be going to Ireland next week.She would be wise to arrange for a(n)________ prior to leaving so that she can withdraw cash and transfer money between bank accounts on her trip.

Accepted Answer

A)  ecard 
B)  smart card 
C)  debit card 
D)  NetCash 
E)  ecash 
A)  ecard 
B)  smart card 
C)  debit card 
D)  NetCash 
E)  ecash

Question 18

If the Bank of Canada wants to decrease the money supply,it can _________; if it wants to increase the money supply,it can ____________.

Accepted Answer

A)  sell government securities; buy government securities 
B)  raise the bank rate; buy government securities 
C)  increase the value of the Canadian dollar; decrease the value of the Canadian dollar 
D)  lower the bank rate; sell government securities 
E)  buy government securities; sell government securities 
A)  sell government securities; buy government securities 
B)  raise the bank rate; buy government securities 
C)  increase the value of the Canadian dollar; decrease the value of the Canadian dollar 
D)  lower the bank rate; sell government securities 
E)  buy government securities; sell government securities

Question 19

Venture capital firms are mainly in the business of selling bonds to retired investors.

Accepted Answer

A) True 
 B)False

Question 20

If the Bank of Canada wants to stimulate business activity,it can buy government securities.

Accepted Answer

A) True 
 B)False

The prime rate of interest is the rate charged

What is the prime rate of interest?

What is the largest credit union in Canada (based on annual revenues)?

Which of the following is a potential problem with ecash?

A plastic card that allows an individual to transfer money between bank accounts is a(n)

Credit cards are widely used in business transactions but are not included in either M-1 or M-2.

The value of money will fluctuate in response to the laws of demand and supply just as the value of a corn crop will fluctuate by the same laws.

Retailers like Canadian Tire are not allowed to provide financial service products that compete with those provided by banks.

If the reserve requirement were 10 percent,a $100 deposit could result in a ______ increase in new deposits for all banks in the system.

In 2011,what proportion of paper money in Canada was counterfeit?

Which of the following is not included in either M-1 or M-2?

A demand deposit is

A ________ buys accounts receivables from a firm for less than face value.

What term identifies a bank's promise to pay a foreign business firm (e.g.,a German firm)a certain amount if specified conditions are met?

Foreign banks are not allowed to do business in Canada.

Jack is one of the bank's most creditworthy customers.The interest rate available to Jack is the

Terri will be going to Ireland next week.She would be wise to arrange for a(n)________ prior to leaving so that she can withdraw cash and transfer money between bank accounts on her trip.

If the Bank of Canada wants to decrease the money supply,it can _; if it wants to increase the money supply,it can ____.

Venture capital firms are mainly in the business of selling bonds to retired investors.

If the Bank of Canada wants to stimulate business activity,it can buy government securities.

Understanding the Canadian Business System

Understanding the Environments of Business

Conducting Business Ethically and Responsibly

Understanding Entrepreneurship, small Business, and New Venture Creation

The Global Context of Business

Managing the Business Enterprise

Managing Human Resources

Understanding Labourmanagement Relations

Motivating and Leading Employees

Producing Goods and Services

Increasing Productivity and Quality

Managing Information Systems and Communication Technology

Understanding Accounting Issues

Understanding Marketing Processes and Consumer Behaviour

Developing and Promoting Goods and Services

Pricing and Distributing Goods and Services

Understanding Securities and Investments

Financial Decisions and Risk Management

Filters

Exam 18: Understanding Money and Banking

The prime rate of interest is the rate charged

What is the prime rate of interest?

What is the largest credit union in Canada (based on annual revenues)?

Which of the following is a potential problem with ecash?

A plastic card that allows an individual to transfer money between bank accounts is a(n)

Credit cards are widely used in business transactions but are not included in either M-1 or M-2.

The value of money will fluctuate in response to the laws of demand and supply just as the value of a corn crop will fluctuate by the same laws.

Retailers like Canadian Tire are not allowed to provide financial service products that compete with those provided by banks.

If the reserve requirement were 10 percent,a $100 deposit could result in a ______ increase in new deposits for all banks in the system.

In 2011,what proportion of paper money in Canada was counterfeit?

Which of the following is not included in either M-1 or M-2?

A demand deposit is

A ________ buys accounts receivables from a firm for less than face value.

What term identifies a bank's promise to pay a foreign business firm (e.g.,a German firm)a certain amount if specified conditions are met?

Foreign banks are not allowed to do business in Canada.

Jack is one of the bank's most creditworthy customers.The interest rate available to Jack is the

Terri will be going to Ireland next week.She would be wise to arrange for a(n)________ prior to leaving so that she can withdraw cash and transfer money between bank accounts on her trip.

If the Bank of Canada wants to decrease the money supply,it can _________; if it wants to increase the money supply,it can ____________.

Venture capital firms are mainly in the business of selling bonds to retired investors.

If the Bank of Canada wants to stimulate business activity,it can buy government securities.

Understanding the Canadian Business System

Understanding the Environments of Business

Conducting Business Ethically and Responsibly

Understanding Entrepreneurship, small Business, and New Venture Creation

The Global Context of Business

Managing the Business Enterprise

Managing Human Resources

Understanding Labourmanagement Relations

Motivating and Leading Employees

Producing Goods and Services

Increasing Productivity and Quality

Managing Information Systems and Communication Technology

Understanding Accounting Issues

Understanding Marketing Processes and Consumer Behaviour

Developing and Promoting Goods and Services

Pricing and Distributing Goods and Services

Understanding Securities and Investments

Financial Decisions and Risk Management

Filters

If the Bank of Canada wants to decrease the money supply,it can _; if it wants to increase the money supply,it can ____.