Question 160 / 1 point

The Bank of Canada and the Government of Canada agreement is to achieve ________.

a.a near-zero interest rate

b.full employment at all costs

c.low inflation at all costs

d.an average inflation rate of 2 percent a year

Question 170 / 1 point

The first link in the chain of events triggered by a rise in the overnight loans rate is

a.a rise in other short-term nominal interest rates

b.a rise in the long-term real interest rate

c.a fall in net exports

d.a fall in consumption expenditure

Question 18

Which of the following would be considered money?

a.credit cards

b.cheques

c.debt cards

d.both deposits and debit cards

e.deposits

Question 19

A key element that put U.S. banks under strain during the financial crisis of 20082009 was _____.

a.a loss of cash reserves

b.a widespread fall in asset prices

c.a widespread rise in asset prices

d.a currency drain

Question 20

If a new deposit is made in the banking system the amount of new money created will be limited by ____.

I. the desired reserves ratio

II. the currency drain ratio

III. the monetary base

Question options:

a.I and II but not III

b.I and III but not II

c.II and III but not I

d.I II and III

Question 21

According to the monetary transmission mechanism a decrease in the Bank of Canada's overnight rate would

a.decrease the quantity of money loans and credit.

b.decrease consumption investment and net exports.

c.bring about a decrease in real GDP.

d.bring about a decrease in aggregate demand.

e.increase consumption investment and net exports.