the economics of money, banking, and financial markets

505 #

© 2014 Pearson Canada Inc.#

Economics of Money, Banking & Financial Markets, 5e (Mishkin)
Chapter 17 Tools of Monetary Policy

17.1 The Framework for the Implementation of Monetary Policy

1. 
   

   The interest rate on loans of reserves from one bank to another is ____.
   A) the bank rate
   B) the fed funds rate
   C) the discount rate
   D) the overnight rate
   Answer: D
   Diff: 1 Type: MC Page Ref: 403
   Skill: Recall
   Objective List: 17.1 Characterize the framework for the implementation of monetary policy in
   Canada

   
   


2. 
   

   The overnight rate is ____.
   A) the interest rate on loans from the Bank of Canada
   B) also know as the Bank rate
   C) the rate banks give their best customers
   D) the interest rate on loans of reserves from one bank to another
   Answer: D
   Diff: 1 Type: MC Page Ref: 403
   Skill: Recall
   Objective List: 17.1 Characterize the framework for the implementation of monetary policy in
   Canada

   
   


3. 
   

   The LVTS was put in place in order to eliminate the ____.
   A) systemic risk
   B) principal-agent problem
   C) moral hazard problem
   D) credit risk
   Answer: A
   Diff: 1 Type: MC Page Ref: 404
   Skill: Recall
   Objective List: 17.1 Characterize the framework for the implementation of monetary policy in
   Canada