What is an appropriate reason for the government to borrow money?

Question 6 options:

a)	To encourage foreign ownership of the debt.

b)	To inject new spending into the economy.

c)	To discourage waste in fiscal affairs.

d)	To compensate for a lower bond rating.

Question 7 (1 point)

Bank rate serves as the basis for establishing the chartered banks' prime interest rates.

Question 7 options:

	a) True
	b) False

Question 8 (1 point)

What is the bank rate?

Question 8 options:

a)	The rate of interest that the Bank of Canada pays commercial banks for their deposits.

b)	The rate of interest that the Bank of Canada charges a commercial bank for a loan.

c)	The rate of interest that a commercial bank pays its best customers for their savings.

d)	The rate of interest that a commercial bank charges its best customers for a loan.

Question 9 (1 point)

Fiscal policy is defined as changes in federal ________ and ________ to achieve macroeconomic objectives such as high rates of economic growth, and high employment.

Question 9 options:

a)	interest rates; money supply

b)	taxes; expenditures

c)	taxes; interest rates

d)	taxes; the money supply

Question 10 (1 point)

Mortgage loans are an important activity for banks, and the US banks have been very conservative relative to their Canadian counterparts.

Question 10 options:

	a) True
	b) False

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