Question

Question 4:

What is meant by “token money”?

Question 5:

What is meant by legal tender?

Question 6:

What are the shortcomings of a barter system?

Question 7:

How do chartered banks create money?

Question 8:

What is meant by a bank run?

Question 9:

What is the difference between treasury bills and bonds?

Question 10:

Are credit cards money?

Question 11:

Why are there different definitions for the Canadian money supply?

Question 12:

What are Chartered banks?

Question 13:

What are the differences between Chartered banks and caisse populaire?

Question 14:

Is the Bank of Canada a Chartered bank?

Question 15:

What are the 3 necessary characteristics of money for it to work properly?

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Question 16:

What is securitized lending?

Question 17:

Who is CDIC and what role do they play in Canada?

Question 18:

How long is the term for the Governor of the Bank of Canada?

Questions 19:

What are subprime mortgages?

Questions 20:

What is the prime rate and the Bank of Canada target rate?

Questions 21:

Policy makers around the world are considering the benefits of a weaker currency, why?

Questions 22:

What is a better deal for a $250 TV,

1/ a 10% discount

2/ a reduction of $30

Why?

Questions 23:

What does “easy credit” mean?

Question 24:

What is the difference between liquidity and solvency risk?

Question 25:

At what credit rating do most investors stop buying bonds?

Question 26:

What is meant by Monetary Policy, who set it in Canada and how do they operate?

Please provide a brief example of monetary action.

Question 27:

What is meant by fiscal policy, who sets it in Canada and how do they operate, please provide a brief example of fiscal action.

Question 28:

Who are the three big bond rating agencies?

Questions 29:

What is the central bank in Canada called, who is the head of the bank and what is their chief mandate?

Questions 30:

Describe leverage and explain how it can impacted banks in a downturn.

Question 31:

Is having a large amount of debt relative to your disposable income a good thing or a bad thing, give 2 reasons why?

Question 32:

What does “lending standards for home buyers are weak” mean?

Question 33:

What does a mortgage down payment mean?

Question 34:

What is the Federal Reserve System?

a. the nation’s central bank

b. the U.S. Department of Banking

c. U.S. Department of the Treasury, Banking Division

d. the legal requirement that interest must be paid on loans.

e. the only national bank in the United States, located in Washington, D.C.

Question 35:

Which of the following is a function of the Federal Reserve?

a. makes monetary policy

b. prints currency and mints coin

c. regulates and supervises banks

d. all of the above

e. a and c only

Question 36:

Real gross domestic product is:

a. the market value of all final goods and services produced within a country in a year.

b. the market value of all intermediate goods and services produced within a country

in a year.

c. the market value of all final goods and services produced within a country in a

year, adjusted for inflation.

d. the market value of all final goods and services produced within a country in a year,

Question 37:

23. The money supply is the amount:

a. of gold in Fort Knox.

b. the federal government has to spend each year.

c. of currency printed each year by the Bureau of Engraving and Printing.

d. of currency, coins and checking account deposits available in an economy.

e. a and d only

Question 38:

The national debt is the:

a. annual deficit.

b. amount loaned to banks by the Bank of Canada.

c. difference between the amount of goods exported and the amount imported.

d. the financial obligations of the government resulting from deficit spending.

e. the sum of all money owed by individuals and businesses in the United States to other

countries.

Question 39:

Who regulates the chartered banks in Canada?

Question 40

What is the difference between real and nominal interest rate?

Answer 1

Answe 4)

Token Money isa form of money which represents a greater value than its intrinsic value.

Originally medium of exchange involved metals with intrinsic value – such as gold coins. However, it became inconvenient to carry around sufficient gold. Therefore banks began issuing token money – notes and coins which they promised could be converted into gold.

Answer 5 Legal tender is officially defined as the coins or banknotes that must be accepted if offered in payment of a debt.

Answer 6)Drawbacks of Barter Systems:

Lack of double coincidence of wants.

Lack of a common measure of value.

Indivisibility of certain goods.

Difficulty in making deferred payments.

Difficulty in storing value.

Answer 7

Most of the money in our economy is created by banks, in the form of bank deposits – the numbers that appear in your account. Banks create new money whenever they make loans. ... Banks can create money through the accounting they use when they make loans.

Answer 8)

bank run occurs when many clients withdraw their money from a bank, because they believe the bank may cease to function in the near future.

Answer 9)The main difference between the two is the maturity term. While Treasury Bills have maturities of up to 1 year, Government Bonds are investment instruments that have maturities of more than 1 year.

Answer 10)Credit cards are not money. ... The interest is often very high, so if you don't have the money to pay off the credit card, it it best to avoid using one. If you must borrow money, it is best to get a lower cost bank loan. Money, in contrast, is legal tender that you get in form of metal coins and paper bills.