The purchase of government bonds by the Bank of Canada

Question 27 options:

increases the quantity of money.

decreases aggregate demand.

decreases the supply of loanable funds

decreases the quantity of money.

The principle of opportunity cost is that

Question 29 options:

the economic cost of using a factor of production is the alternative use of that factor that is given up.

taking advantage of investment opportunities involves costs.

in a market economy, taking advantage of profitable opportunities involves some money cost.

the cost of production varies depending on the opportunity for technological application.

The money demand curve has a

Question 30 options:

positive slope because an increase in the price level increases the quantity of money demanded

negative slope because an increase in the interest rate decreases the quantity of money demanded

negative slope because an increase in the price level decreases the quantity of money demanded

positive slope because an increase in the interest rate increases the quantity of money demanded

Employees at the university have negotiated a 5 percent increase in wages for the next year, based on their inflation expectations. If inflation is actually 6 percent over the next year, which of the following will occur?

Question 31 options:

Inflation will be 5 percent the following year

Unemployment of university employees will rise

The increase in inflation is expected

Real wages for university employees will fall

Which of the following isnota function of the Bank of Canada?

Question 32 options:

performing cheque clearing services

acting as a lender of last resort

acting as a banker's bank

taking actions to control the money supply

Scenario 3.4. Imagine that Kristy deposits $10,000 of currency into her chequing account deposit at Bank A and that the desired reserve ratio is 20%. Refer to Scenario 3.4. As a result of Kristy's deposit, Bank A's reserves immediately increase by

Question 34 options:

$10,000.

$8,000

$20,000

$2,000.

$50,000.