the economics of money, banking, and financial markets

530 #

© 2014 Pearson Canada Inc.#

5. 
   

   The Bank of Canada neutralizes SRA operations so as to ____.
   A) not to leave the system in a surplus position at the end of the day
   B) to leave the system in a surplus position at the end of the day
   C) as not to leave the system in a deficit position at the end of the day
   D) as to leave the system in a deficit position at the end of the day
   Answer: C
   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

   
   


6. 
   

   The Bank of Canada neutralizes government receipts by ____.
   A) arranging an increase in government deposit auctions
   B) leaving the system in a surplus position at the end of the day
   C) reducing the banking system's settlement balances
   D) leaving the system in a deficit position at the end of the day
   Answer: A
   Diff: 2 Type: MC Page Ref: 418
   Skill: Recall
   Objective List: 17.3 Identify the Bank of Canada's approach to monetary policy and the tools of
   policy

   
   


7. 
   

   If government deposits at the Bank of Canada are predicted to decrease the Bank will offset
   the transaction through LVTS transfers to ____ settlement balances.
   A) increase
   B) decrease
   C) flood
   D) inject
   Answer: B
   Diff: 2 Type: MC Page Ref: 418 - 419
   Skill: Recall
   Objective List: 17.3 Identify the Bank of Canada's approach to monetary policy and the tools of
   policy

   
   


8. 
   

   If government deposits at the Bank of Canada are predicted to increase, the Bank will offset
   the transaction through government debt auctions to ____ settlement balances.
   A) decrease
   B) increase
   C) inflate
   D) drain
   Answer: B
   Diff: 2 Type: MC Page Ref: 418 - 419
   Skill: Recall
   Objective List: 17.3 Identify the Bank of Canada's approach to monetary policy and the tools of
   policy