1. If government deposits at the Bank of Canada are predicted
to increase, what open market operations could
be undertaken to neutralize the eff ect on settlement
3. If the government has just paid for major computer upgrades
and as a result its deposits with the Bank of Canada
fall, what open market operations could be undertaken?
5. Most open market operations are currently repurchase
agreements. What does this tell us about the likely
volume of open market operations relative to dynamic
open market operations?
7. If the Bank of Canada did not administer the operating
band, what do you predict would happen to the money
supply if the bank rate were several percentage points
below the overnight rate?
9. “Last-resort lending is no longer needed because the
presence of the CDIC eliminates the possibility of bank
panics.” Is this statement true, false, or uncertain?
11. You often read in the newspaper that the Bank of
Canada has just lowered the target overnight rate. Does