the economics of money, banking, and financial markets

460 $

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5. Who are the three players in the money supply process? Describe their roles.
   Answer: The three players are: the central bank, depository institutions (banks) and depositors.
   The central bank (in Canada, the Bank of Canada) oversees the banking system and is
   responsible for the conduct of monetary policy. Banks are the financial intermediaries that
   accept deposits from individuals and institutions. Depositors, both individuals and institutions,
   hold deposits in banks.
   Diff: 1 Type: SA Page Ref: 375
   Skill: Recall
   Objective List: 16.1 Summarize the Bank of Canada's balance sheet and the monetary base

16.2 The Bank of Canada's Balance Sheet

1. 
   

   Both ____ and ____ are Bank of Canada assets.
   A) notes in circulation; reserves
   B) notes in circulation; government securities
   C) government securities; advances to banks
   D) government securities; reserves
   Answer: C
   Diff: 1 Type: MC Page Ref: 376
   Skill: Recall
   Objective List: 16.1 Summarize the Bank of Canada's balance sheet and the monetary base

   
   


2. 
   

   The monetary liabilities of the Bank of Canada include ____.
   A) government securities and advances to banks
   B) notes in circulation
   C) government securities and reserves
   D) notes in circulation and advances to banks
   Answer: B
   Diff: 1 Type: MC Page Ref: 376
   Skill: Recall
   Objective List: 16.1 Summarize the Bank of Canada's balance sheet and the monetary base

   
   


3. 
   

   Both ____ and ____ are monetary liabilities of the Bank.
   A) government securities; advances to banks
   B) notes in circulation; reserves
   C) government securities; reserves
   D) notes in circulation; advances to banks
   Answer: B
   Diff: 1 Type: MC Page Ref: 376
   Skill: Recall
   Objective List: 16.1 Summarize the Bank of Canada's balance sheet and the monetary base