Question 1 

Fill in the blanks to make the following statements correct.

1.1 Money serves 3 functions: _____________, ___________, and ___________.

1.2 Suppose children at a summer camp are each given a credit of $20 at the snack shop, where purchases are recorded but no cash is exchanged. This is an example of money as a(n) _____________ and a(n) _____________.

1.3 Paper money and coins that are not convertible into anything with intrinsic value, but are declared by the government to be legal tender, are known as ____________.

1.4 Canada has a(n) _____________ reserve banking system, in which commercial banks keep only a fraction of their total deposits in reserves. A commercial bank has a(n) _________ ratio that governs what it attempts to keep as reserves.

1.5 There are multiple measures of the money supply in Canada because, in addition to currency in circulation, there are many different types of bank ___________.

1.6 The most general definition of the money supply is the sum of __________ and ____________. 

1.7 A term deposit at a bank does not fulfill the __________ role of money. However, it can be easily converted into a deposit that does fulfill this role. For this reason, a term deposit is referred to as ___________.

1.8 A credit card can serve as a medium of exchange, but it is not a ____________. For this reason, credit cards are referred to as a _______________.

Question 2 

 

List the main functions of the Bank of Canada.