1. If Canada's nominal rate is 2% and inflation rate is -10 percent, the real rate is A) 2 percent B) 10 percent C) 8 percent D) 12 percent

2. When the Bank of Canada purchases and sell bonds this activity is called? A) repurchase agreements B) interbank borrowing C) monetary base transactions D) open market buyback operations

3. Which of the following is most suited for lenders A) The interest rate is 4 percent and the expected inflation rate is 1 percent. B) The interest rate is 9 percent and the expected inflation rate is 7 percent. C) The interest rate is 13 percent and the expected inflation rate is 15 percent. D) (The interest rate is 25 percent and the expected inflation rate is 50 percent.

4. Which of the following is most suited for lenders borrower? A)The interest rate is 9 percent and the expected inflation rate is 7 percent. B)The interest rate is 25 percent and the expected inflation rate is 50 percent. C)The interest rate is 4 percent and the expected inflation rate is 1 percent. D)The interest rate is 13 percent and the expected inflation rate is 15 percent.

5. ---is not a functions of the Bank of Canada? A)Conducting economic research B)Cheque clearing C) Issuing new currency D) Setting interest rates payable on time deposits