the economics of money, banking, and financial markets

526 #

© 2014 Pearson Canada Inc.#

12. 
    

    If the Bank of Canada wants to temporarily drain reserves from the banking system, it will
    engage in ____.
    A) a repurchase agreement
    B) a sale and repurchase agreement
    C) a "pump" agreement
    D) None of the above.
    Answer: B
    Diff: 2 Type: MC Page Ref: 416 - 417
    Skill: Applied
    Objective List: 17.3 Identify the Bank of Canada's approach to monetary policy and the tools of
    policy

    
    


13. 
    

    The Bank of Canada will engage in a sale and repurchase agreement when it wants to
    ____ reserves ____ in the banking system.
    A) increase; permanently
    B) increase; temporarily
    C) decrease; temporarily
    D) decrease; permanently
    Answer: C
    Diff: 2 Type: MC Page Ref: 416 - 417
    Skill: Applied
    Objective List: 17.3 Identify the Bank of Canada's approach to monetary policy and the tools of
    policy

    
    


14. 
    

    The Bank of Canada will engage in a repurchase and resale agreement when it wants to
    ____ reserves ____ in the banking system.
    A) increase; permanently
    B) increase; temporarily
    C) decrease; temporarily
    D) decrease; permanently
    Answer: B
    Diff: 2 Type: MC Page Ref: 415 - 416
    Skill: Applied
    Objective List: 17.3 Identify the Bank of Canada's approach to monetary policy and the tools of
    policy

    
    


15. 
    

    SPRAs and SRAs are ____ open market operations.
    A) temporary
    B) permanent
    C) risky
    D) conducted 8 times a year
    Answer: A
    Diff: 2 Type: MC Page Ref: 417
    Skill: Recall
    Objective List: 17.3 Identify the Bank of Canada's approach to monetary policy and the tools of
    policy