the economics of money, banking, and financial markets

524 #

© 2014 Pearson Canada Inc.#

4. 
   

   If the Bank of Canada wants to relieve undesired upward pressure on the overnight interest
   rate it will enter into a ____.
   A) Special Purchase and Resale Agreement
   B) Sale and Repurchase Agreement
   C) Swap
   D) Reverse Repo
   Answer: A
   Diff: 2 Type: MC Page Ref: 415
   Skill: Recall
   Objective List: 17.3 Identify the Bank of Canada's approach to monetary policy and the tools of
   policy

   
   


5. 
   

   If the Bank of Canada wants to relieve undesired upward pressure on the overnight interest
   rate it will enter into a ____.
   A) Resale Agreement
   B) Sale and Repurchase Agreement
   C) Swap
   D) Repo
   Answer: D
   Diff: 2 Type: MC Page Ref: 415
   Skill: Recall
   Objective List: 17.3 Identify the Bank of Canada's approach to monetary policy and the tools of
   policy

   
   


6. 
   

   A repo is a ____.
   A) Resale Agreement
   B) Purchase and Resale Agreement
   C) Swap
   D) Repo
   Answer: B
   Diff: 2 Type: MC Page Ref: 415
   Skill: Recall
   Objective List: 17.3 Identify the Bank of Canada's approach to monetary policy and the tools of
   policy

   
   


7. 
   

   Sale and Repurchase Agreements ____.
   A) relieve undesired upward pressure on the overnight interest rate
   B) alleviate undesired downward pressure on the overnight financing rate
   C) relieve undesired downward pressure on the overnight interest rate
   D) alleviate undesired volatility in the overnight financing rate
   Answer: B
   Diff: 2 Type: MC Page Ref: 415
   Skill: Recall
   Objective List: 17.3 Identify the Bank of Canada's approach to monetary policy and the tools of
   policy