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Unformatted text preview: v) Briefly outline the role of the LVTS (Large Value Transfer System) in the Canadian financial system (i.e. what is it, and what is it for?) vi) Briefly describe the overnight rate and the operating band . Why do we expect the overnight rate to stay within the operating band ? vii) Suppose the Bank of Canada wants to reduce the overnight rate . a) Precisely what actions does it take? b) Explain why these actions cause the overnight rate to fall. c) What are the effects on the Bank of Canada’s balance sheet? d) What is the relationship between the Bank of Canada’s control over the money supply and short term interest rates? Explain. viii) Briefly outline the evolution of U.S. monetary policy over the past 3 years, with reference to changes in the Federal Reserve’s balance sheet. ix) Discuss the impact of the changes outlined in viii) on the money supply....
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This note was uploaded on 01/26/2012 for the course ECON 401 taught by Professor Burbidge,john during the Fall '08 term at Waterloo.
- Fall '08