1.The Goods and Services Tax (GST) is a ______________

a.income tax

b.consumption tax

c.delivery tax

d.carbon tax

2.The supply of money (M1) consists almost entirely of

a.the debt of the federal government

b.demand deposits at chartered banks

c.Government of Canada bonds

d.currency (coins and paper money)

3.Which of the following banking transactions will 'destroy' money (ie. Reduce the money supply)?

a.A business takes out a loan

b.A business puts $2,000 in a bank

c.A business pays $2,000 in cash to a supplier

d.A business pays back a loan

4.As interest rates increase, transaction demand for money increases as well.

a.True

b.False

c.I have no idea.

5."The percentage of income taxes paid is a set or a flat rate" best describes which type of income tax?

a.Progressive

b.Regressive

c.Proportional

d.Seriously, I have no idea.

6.What is the main objective of monetary policy?

a.To achieve a full-employment, non-inflationary level of output

b.The maintain good relations with the federal government

c.To raise the value of the Canadian dollar relative to the US dollar

d.To lower the value of the Canadian dollar relative to the US dollar

7.Asset demand is a function of:

a.Income

b.Wealth

c.Interest Rates

d.Money Supply

8.Which of the following monetary policies will increase aggregate demand (AD)?

a.The Bank of Canada purchases bonds from chartered banks

b.The Bank of Canada shifts Government of Canada deposits

from itself to the chartered banks.

c.The Bank of Canada reduces the bank rate

d.All of the above

9.Which of the following would be the most expansionary?

a.A $20 billion decrease in taxes

b.A $20 billion increase in government spending

c.A $20 billion increase in both government spending and taxes

d.A $20 billion decrease in both government spending and taxes