Question 1

When the Bank of Canada wants to stimulate business activity and increase the money supply, it
buys government securities.
raises the reserve requirement.
decreases government spending.
raises the bank rate.
sells government securities.

Accepted Answer

The answer of When the Bank of Canada wants to...

Question 2

Which of the following is correct with regard to Canadian banks?
They are not allowed to provide financing to small businesses because those businesses are too risky.
They are not allowed to sell shares of stock to the general public.
They are allowed to provide insurance services, but not in their bank branches.
They are protected from competition from foreign controlled banks.
All of these are correct.

Accepted Answer

The answer of Which of the following is correct with...

Question 3

Cynthia is concerned about electronic money because
power failures cause information to be lost.
hackers may break into e-cash systems and steal the money in them.
there are extensive rules and regulations dealing with e-money.
electronic money generates an extremely large amount of paper.
banks will generally not recognize this form of money.

Accepted Answer

The answer of Cynthia is concerned about electronic money because
power...

Question 4

After using her _______ card to make a purchase, Janet checks an electronic display to determine how much money is left on the card.
debit
smart
direct-purchase
direct deposit
credit

Accepted Answer

The answer of After using her _______ card to make...

Question 5

When the Bank of Canada wants to slow down business activity and decrease the money supply, it
lowers the bank rate.
lowers the reserve requirement.
decreases government spending.
buys government securities.
raises the bank rate.

Accepted Answer

The answer of When the Bank of Canada wants to...

Question 6

If the reserve requirement was 10 percent, a $100 deposit could result in a ______ increase in new deposits for all banks in the system.
$200
$500
$1000
$10 000
$100 000

Accepted Answer

The answer of If the reserve requirement was 10 percent,...

Question 7

Banks expand the money supply by
opening new chequing accounts.
earning higher profits.
paying interest on accounts.
printing money.
taking in deposits and lending money.

Accepted Answer

The answer of Banks expand the money supply by
opening new...

Question 8

A _______ is a bank's promise to pay a specified amount of money at a future date.
bankers' acceptance
electronic funds transfer
promissory note
bank loan
letter of credit

Accepted Answer

The answer of A _______ is a bank's promise to...

Question 9

An alternative bank that safeguards funds and estates in its care is called a(n)
trustee.
credit union.
trust company.
pension fund.
Schedule B bank.

Accepted Answer

The answer of An alternative bank that safeguards funds and...

Question 10

If the Bank of Canada wants to decrease the money supply, it can _________; if it wants to increase the money supply, it can ____________.
sell government securities; buy government securities
raise the bank rate; buy government securities
increase the value of the Canadian dollar; decrease the value of the Canadian dollar
lower the bank rate; sell government securities
buy government securities; sell government securities

Accepted Answer

The answer of If the Bank of Canada wants to...

Question 11

Which of the following is most likely to get an unsecured loan?
A retail florist shop with collateral
A wholesale grocer with a marginal credit history
A lawyer with collateral
A large manufacturing firm with an excellent credit rating
A farmer

Accepted Answer

The answer of Which of the following is most likely...

Question 12

What is a debit card?
The same thing as a demand deposit
Money that moves along multiple channels of consumers and businesses via digital electronic transmissions
A type of plastic money that immediately reduces the balance in the user's bank account when it is used
An electronic purse that can be programmed with electronic money at ATM machines
The same thing as a time deposit

Accepted Answer

The answer of What is a debit card?
The same thing...

Question 13

The interest rate at which chartered banks can borrow from the Bank of Canada is the
preferred rate.
prime rate.
prime plus 1 percent.
bond rate.
bank rate.

Accepted Answer

The answer of The interest rate at which chartered banks...

Question 14

Which of the following Bank of Canada actions would be consistent with an expansionary policy?
Sell government securities
Raise the margin requirement
Buy government securities
Raise the reserve requirement
Raise the bank rate

Accepted Answer

The answer of Which of the following Bank of Canada...

Question 15

The main purpose of the Bank of Canada is to
set prime interest rates.
assist in the merger of troubled banks with healthier institutions.
bail out banks like the Northland and CCB.
deregulate the banking industry.
control the nation's money supply.

Accepted Answer

The answer of The main purpose of the Bank of...

Question 16

Jack is one of the bank's most creditworthy customers. The interest rate available to Jack is the
reserve requirement rate.
overnight rate.
prime rate.
discount rate.
rediscount rate.

Accepted Answer

The answer of Jack is one of the bank's most...

Question 17

Which of the following might the Bank of Canada do to increase the money supply?
Sell government securities
Increase the bank rate
Impose a new tax
Buy government securities
Increase the reserve rate

Accepted Answer

The answer of Which of the following might the Bank...

Question 18

If the Bank of Canada wanted to stimulate business activity, it could ______, but if it wanted to slow down business activity it could ______.
sell government securities; raise the reserve requirement
raise the margin requirement; raise the reserve requirement
buy government securities; sell government securities
sell government securities; buy government securities
raise the bank rate; lower the bank rate

Accepted Answer

The answer of If the Bank of Canada wanted to...

Question 19

Which of the following will result in an decrease of the money supply?
An increase in taxes
Purchase of securities by the Bank of Canada
A decrease in the bank rate
An increase in the discount rate
A decrease in reserve requirements

Accepted Answer

The answer of Which of the following will result in...

Question 20

Which of the following provides cooperative savings and lending services to its members?
Schedule B bank
Trustee
Credit union
Trust company
Pension fund

Accepted Answer

The answer of Which of the following provides cooperative savings...

Quiz 14: Money and Banking

When the Bank of Canada wants to stimulate business activity and increase the money supply, it buys government securities. raises the reserve requirement. decreases government spending. raises the bank rate. sells government securities.

After using her _______ card to make a purchase, Janet checks an electronic display to determine how much money is left on the card. debit smart direct-purchase direct deposit credit

When the Bank of Canada wants to slow down business activity and decrease the money supply, it lowers the bank rate. lowers the reserve requirement. decreases government spending. buys government securities. raises the bank rate.

If the reserve requirement was 10 percent, a $100 deposit could result in a ______ increase in new deposits for all banks in the system. $200 $500 $1000 $10 000 $100 000

Banks expand the money supply by opening new chequing accounts. earning higher profits. paying interest on accounts. printing money. taking in deposits and lending money.

A _______ is a bank's promise to pay a specified amount of money at a future date. bankers' acceptance electronic funds transfer promissory note bank loan letter of credit

An alternative bank that safeguards funds and estates in its care is called a(n) trustee. credit union. trust company. pension fund. Schedule B bank.

Which of the following is most likely to get an unsecured loan? A retail florist shop with collateral A wholesale grocer with a marginal credit history A lawyer with collateral A large manufacturing firm with an excellent credit rating A farmer

The interest rate at which chartered banks can borrow from the Bank of Canada is the preferred rate. prime rate. prime plus 1 percent. bond rate. bank rate.

Which of the following Bank of Canada actions would be consistent with an expansionary policy? Sell government securities Raise the margin requirement Buy government securities Raise the reserve requirement Raise the bank rate

The main purpose of the Bank of Canada is to set prime interest rates. assist in the merger of troubled banks with healthier institutions. bail out banks like the Northland and CCB. deregulate the banking industry. control the nation's money supply.

Jack is one of the bank's most creditworthy customers. The interest rate available to Jack is the reserve requirement rate. overnight rate. prime rate. discount rate. rediscount rate.

Which of the following might the Bank of Canada do to increase the money supply? Sell government securities Increase the bank rate Impose a new tax Buy government securities Increase the reserve rate

Which of the following will result in an decrease of the money supply? An increase in taxes Purchase of securities by the Bank of Canada A decrease in the bank rate An increase in the discount rate A decrease in reserve requirements

Which of the following provides cooperative savings and lending services to its members? Schedule B bank Trustee Credit union Trust company Pension fund