the economics of money, banking, and financial markets

455 $

© 2014 Pearson Canada Inc.$

17. 
    

    Which of the following statements are true of the Bank of England?
    A) The Bank of England was established in 1894.
    B) Until 1997, the decision to raise or lower interest rates resided not with the Bank of England
    but with the chancellor of the Exchequer.
    C) The government can overrule the Bank and set rates "in extreme economic circumstances"
    and "for a limited period."
    D) Both B and C of the above.
    Answer: D
    Diff: 3 Type: MC Page Ref: 371
    Skill: Recall
    Objective List: 15.2 Identify the Bank of Canada's functions and degree of independence and
    specify the arguments for and against an independent central bank

    
    


18. 
    

    While legislation enacted in 1998 granted the Bank of Japan new powers and greater
    autonomy, its critics contend that its independence is ____.
    A) limited by the Ministry of Finance's control over a portion of its budget
    B) too great because it need not pursue a policy of price stability even if that is the popular will
    of the people
    C) too great since the Ministry of Finance no longer has veto power over the bank's budget
    D) limited since the Ministry of Finance can dismiss senior bank officials
    Answer: A
    Diff: 3 Type: MC Page Ref: 372
    Skill: Recall
    Objective List: 15.2 Identify the Bank of Canada's functions and degree of independence and
    specify the arguments for and against an independent central bank

    
    


19. 
    

    The Bank of Japan was founded in ____.
    A) 1882
    B) 1922
    C) 1932
    D) 1952
    Answer: A
    Diff: 2 Type: MC Page Ref: 372
    Skill: Recall
    Objective List: 15.2 Identify the Bank of Canada's functions and degree of independence and
    specify the arguments for and against an independent central bank