The only way that the bank of canada can affect the

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4. "The only way that the Bank of Canada can affect the level of advances is by adjusting the bank rate."
false, because adjustments in the bank rate do not affect the level of advances.
5. How does the operating band affect interest rates and the money supply in the economy? the
6. "Last-resort lending is no longer needed because the presence of the CDIC eliminates the possibility of bank panics." Is this statement true or false?
7. 8. The benefits of using last-resort lending to prevent bank panics are straightforward. What are the costs? The costs of using last-resort lending to prevent bank panics include: Poorly-run banks will survive because they were bailed out. Banks may take on more risk because they believe they are "too big to fail." Greater losses to taxpayers. Greater losses to the CDIC . The costs are that banks that deserve to go out of business because of poor management may survive because of Bank of Canada lending to prevent panics. This might lead to an inefficient banking system with many poorly run banks.
9. Use the following criteria -- flexibility, reversibility, and speed of implementation -- to compare the use of open market operations and government deposit shifting to control the money supply.

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