Question 1

What type of institution shares risk with its policyholders in return for payment of a premium?

Accepted Answer

A)  Trust company 
B)  Schedule B Bank 
C)  Credit union 
D)  Pension fund 
E)  Life insurance company 
A)  Trust company 
B)  Schedule B Bank 
C)  Credit union 
D)  Pension fund 
E)  Life insurance company

Question 2

Smart cards are credit card-sized plastic cards that can be programmed with electronic money.

Accepted Answer

A) True 
 B)False

Question 3

Deregulation of banks has caused banks to ________.

Accepted Answer

A)  decrease the amount of funds they lend to small business 
B)  abandon plans for expansion into foreign markets 
C)  stop issuing commercial paper 
D)  increase their level of foreign ownership 
E)  diversify to provide a wider array of financial products to their clients 
A)  decrease the amount of funds they lend to small business 
B)  abandon plans for expansion into foreign markets 
C)  stop issuing commercial paper 
D)  increase their level of foreign ownership 
E)  diversify to provide a wider array of financial products to their clients

Question 4

A(n)________ card is a credit card-sized computer that can be programmed with "electronic money."

Accepted Answer

A)  e- 
B)  ecash 
C)  debit 
D)  smart 
E)  NetCash 
A)  e- 
B)  ecash 
C)  debit 
D)  smart 
E)  NetCash

Question 5

Which of the following is correct with regard to recent changes in banking in Canada?

Accepted Answer

A)  Banks are increasingly focusing on their role as intermediaries between depositors and borrowers. 
B)  Consumers are turning to electronic banks like President's Choice Financial. 
C)  Rather than making most of their profit from investment banking fees,banks now make most of their money from the spread between interest rates paid to depositors and the rates charged on loans. 
D)  During the last few years,large companies have increased their reliance on bank loans. 
E)  U.S.and other foreign banks are not allowed to do business in Canada. 
A)  Banks are increasingly focusing on their role as intermediaries between depositors and borrowers. 
B)  Consumers are turning to electronic banks like President's Choice Financial. 
C)  Rather than making most of their profit from investment banking fees,banks now make most of their money from the spread between interest rates paid to depositors and the rates charged on loans. 
D)  During the last few years,large companies have increased their reliance on bank loans. 
E)  U.S.and other foreign banks are not allowed to do business in Canada.

Question 6

Which is not a purpose of the International Monetary Fund?

Accepted Answer

A)  Encourage development of a system for international payments 
B)  Promote social programs in nations suffering from negative trade balances 
C)  Encourage members to co-operate on international monetary issues 
D)  Promote the stability of exchange rates 
E)  Provide temporary short-term loans to member countries 
A)  Encourage development of a system for international payments 
B)  Promote social programs in nations suffering from negative trade balances 
C)  Encourage members to co-operate on international monetary issues 
D)  Promote the stability of exchange rates 
E)  Provide temporary short-term loans to member countries

Question 7

Chartered banks offer which of the following services?

Accepted Answer

A)  foreign exchange 
B)  automated teller machines 
C)  chequing accounts 
D)  debit and credit cards 
E)  all of these 
A)  foreign exchange 
B)  automated teller machines 
C)  chequing accounts 
D)  debit and credit cards 
E)  all of these

Question 8

According to the Big Mac index,in 2012 the currency of ______ was overvalued,while the currency of ______ was undervalued.

Accepted Answer

A)  Norway; Switzerland 
B)  India; China 
C)  Canada; India 
D)  South Korea; Brazil 
E)  Sweden; Australia 
A)  Norway; Switzerland 
B)  India; China 
C)  Canada; India 
D)  South Korea; Brazil 
E)  Sweden; Australia

Question 9

The Canadian dollar has fluctuated quite a bit over the last few decades,ranging from as low as $0.62 U.S.to as high as $1.09 U.S.

Accepted Answer

A) True 
 B)False

Question 10

The main purpose of the Bank of Canada is to

Accepted Answer

A)  set prime interest rates. 
B)  assist in the merger of troubled banks with healthier institutions. 
C)  bail out banks like the Northland and CCB. 
D)  deregulate the banking industry. 
E)  control the nation's money supply. 
A)  set prime interest rates. 
B)  assist in the merger of troubled banks with healthier institutions. 
C)  bail out banks like the Northland and CCB. 
D)  deregulate the banking industry. 
E)  control the nation's money supply.

Question 11

Which of the following is correct with regard to the Canadian banking system?

Accepted Answer

A)  It is very similar to that in the U.S.,where there are many different banks,each with just a few branches. 
B)  The five largest Canadian banks account for about 50 percent of total bank assets. 
C)  Schedule A banks are those that are Canadian-owned and have no more than 10 percent of voting shares controlled by a single interest. 
D)  Because there a just a few large banks,banking is not very competitive in Canada. 
E)  Banks perform largely a storage function for money,and they do not generally help their customers manage their money. 
A)  It is very similar to that in the U.S.,where there are many different banks,each with just a few branches. 
B)  The five largest Canadian banks account for about 50 percent of total bank assets. 
C)  Schedule A banks are those that are Canadian-owned and have no more than 10 percent of voting shares controlled by a single interest. 
D)  Because there a just a few large banks,banking is not very competitive in Canada. 
E)  Banks perform largely a storage function for money,and they do not generally help their customers manage their money.

Question 12

Scott sneaked a peek at Laura's paycheque.He discovered that she makes $200 a month more than he does,and he concludes that her job must be more important than his.This illustrates the ________ function of money.

Accepted Answer

A)  store of value 
B)  medium of exchange 
C)  payment for labour 
D)  unit of account 
E)  basis for banking system 
A)  store of value 
B)  medium of exchange 
C)  payment for labour 
D)  unit of account 
E)  basis for banking system

Question 13

The law of one price says that

Accepted Answer

A)  almost all companies will have a trade deficit. 
B)  identical products should sell for the same price in all countries. 
C)  a good must be available for the same price in every province in Canada. 
D)  the price of a Rolex watch is the same in all countries. 
E)  all currencies are over-valued. 
A)  almost all companies will have a trade deficit. 
B)  identical products should sell for the same price in all countries. 
C)  a good must be available for the same price in every province in Canada. 
D)  the price of a Rolex watch is the same in all countries. 
E)  all currencies are over-valued.

Question 14

Investment dealers are the primary distributors of new stock and bond issues.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following changes have occurred in banking because of deregulation?

Accepted Answer

A)  Large business firms have increased their reliance on bank loans. 
B)  Banks can now make whatever profits they can manage. 
C)  Banks are providing a narrower and more highly focused array of financial products to their customers than they did before deregulation. 
D)  Banks have increased the training given to employees. 
E)  Bank profits are now being sent to foreign financial companies. 
A)  Large business firms have increased their reliance on bank loans. 
B)  Banks can now make whatever profits they can manage. 
C)  Banks are providing a narrower and more highly focused array of financial products to their customers than they did before deregulation. 
D)  Banks have increased the training given to employees. 
E)  Bank profits are now being sent to foreign financial companies.

Question 16

When the Bank of Canada wants to slow down business activity and decrease the money supply,it

Accepted Answer

A)  lowers the bank rate. 
B)  lowers the reserve requirement. 
C)  decreases government spending. 
D)  buys government securities. 
E)  raises the bank rate. 
A)  lowers the bank rate. 
B)  lowers the reserve requirement. 
C)  decreases government spending. 
D)  buys government securities. 
E)  raises the bank rate.

Question 17

In 2011,there were about 1.5 billion Bank of Canada notes in circulation,and about _________ of these were counterfeit.

Accepted Answer

A)  10 000 
B)  61 000 
C)  52 000 
D)  443 000 
E)  it is not known how many counterfeit notes are in circulation 
A)  10 000 
B)  61 000 
C)  52 000 
D)  443 000 
E)  it is not known how many counterfeit notes are in circulation

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

The law of one price is

Accepted Answer

A)  the principle that to be competitive,a company must offer its product at only one price. 
B)  a principle suggested by Canadian economists that means that all products in a given economy should be sold for the same price. 
C)  that the supply and demand of a product must not alter its price. 
D)  a principle that identical products should sell for the same price in all countries. 
E)  if a retailer puts an item on sale,all other retailers must match their price for consumers. 
A)  the principle that to be competitive,a company must offer its product at only one price. 
B)  a principle suggested by Canadian economists that means that all products in a given economy should be sold for the same price. 
C)  that the supply and demand of a product must not alter its price. 
D)  a principle that identical products should sell for the same price in all countries. 
E)  if a retailer puts an item on sale,all other retailers must match their price for consumers.

Question 20

How do banks create money?

Accepted Answer

By taking in deposit

What type of institution shares risk with its policyholders in return for payment of a premium?

Smart cards are credit card-sized plastic cards that can be programmed with electronic money.

Deregulation of banks has caused banks to ________.

A(n)________ card is a credit card-sized computer that can be programmed with "electronic money."

Which of the following is correct with regard to recent changes in banking in Canada?

Which is not a purpose of the International Monetary Fund?

Chartered banks offer which of the following services?

According to the Big Mac index,in 2012 the currency of was overvalued,while the currency of was undervalued.

The Canadian dollar has fluctuated quite a bit over the last few decades,ranging from as low as $0.62 U.S.to as high as $1.09 U.S.

The main purpose of the Bank of Canada is to

Which of the following is correct with regard to the Canadian banking system?

Scott sneaked a peek at Laura's paycheque.He discovered that she makes $200 a month more than he does,and he concludes that her job must be more important than his.This illustrates the ________ function of money.

The law of one price says that

Investment dealers are the primary distributors of new stock and bond issues.

Which of the following changes have occurred in banking because of deregulation?

When the Bank of Canada wants to slow down business activity and decrease the money supply,it

In 2011,there were about 1.5 billion Bank of Canada notes in circulation,and about _________ of these were counterfeit.

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

The law of one price is

How do banks create money?

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

What type of institution shares risk with its policyholders in return for payment of a premium?

Smart cards are credit card-sized plastic cards that can be programmed with electronic money.

Deregulation of banks has caused banks to ________.

A(n)________ card is a credit card-sized computer that can be programmed with "electronic money."

Which of the following is correct with regard to recent changes in banking in Canada?

Which is not a purpose of the International Monetary Fund?

Chartered banks offer which of the following services?

According to the Big Mac index,in 2012 the currency of ______ was overvalued,while the currency of ______ was undervalued.

The Canadian dollar has fluctuated quite a bit over the last few decades,ranging from as low as $0.62 U.S.to as high as $1.09 U.S.

The main purpose of the Bank of Canada is to

Which of the following is correct with regard to the Canadian banking system?

Scott sneaked a peek at Laura's paycheque.He discovered that she makes $200 a month more than he does,and he concludes that her job must be more important than his.This illustrates the ________ function of money.

The law of one price says that

Investment dealers are the primary distributors of new stock and bond issues.

Which of the following changes have occurred in banking because of deregulation?

When the Bank of Canada wants to slow down business activity and decrease the money supply,it

In 2011,there were about 1.5 billion Bank of Canada notes in circulation,and about _________ of these were counterfeit.

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

The law of one price is

How do banks create money?

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

According to the Big Mac index,in 2012 the currency of was overvalued,while the currency of was undervalued.