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WorksheetsMoney,Banking, and Finance
Total questions: 30
Worksheet time: 15mins
What does a Special Purchase and Resale Agreement (SPRA) do?
Decreases the money supply in the long term
Increases the money supply in the short term
Decreases taxes
Reduces bank profits
A Sale and Repurchase Agreement (SRA) is used to:
Encourage consumer borrowing
Increase the stock of foreign reserves
Decrease the money supply
Boost employment
How does deposit switching increase the money supply?
By freezing government accounts
By moving government deposits to banks
By raising the CRR
By buying gold
What action reduces the money supply through deposit switching?
Lowering taxes
Switching deposits from banks to the Central Bank
Increasing interest rates
Decreasing the BR
How does buying foreign currency from the government affect the money supply?
It has no effect
It decreases the money supply
It increases the money supply
It only affects exports
When the Central Bank sells foreign currency to the government, it:
Encourages lending
Reduces inflation
Decreases the money supply
Stimulates the economy
Moral suasion is used by the Central Bank to:
Legally require banks to lend
Threaten banks with penalties
Encourage or discourage bank lending behavior
Raise consumer prices
What does the Purchasing Power Parity (PPP) theory state?
Currency exchange rates are determined by interest rates
Exchange rates depend on international trade volume
Exchange rates adjust to equalize the purchasing power of different currencies
Currency value depends solely on government poli
Which of the following increases the demand for US dollars in Canada?
Canadian exports to the U.S.
U.S. tourists visiting Canada
Canadians importing goods from the U.S.
Foreigners investing in Canada
What causes an increase in the supply of US dollars in Canada?
Canadians traveling to the U.S.
Americans investing in Canadian businesses
Canadian companies buying U.S. equipment
Canadians speculating that the US dollar will rise
Which of the following is a reason for Canadians to demand more US dollars?
Receiving payments for Canadian exports
Holding US dollars as savings
Investing in U.S. real estate
Selling Canadian stocks to Americans
Speculation that the US dollar will fall leads to:
Increased demand for US dollars
Decreased demand for US dollars
Increased Canadian imports
Increased foreign investment in Canada
Which action would increase the supply of US dollars on the foreign exchange market?
Canadian investors buying U.S. stocks
Canadian tourists vacationing in Florida
U.S. companies purchasing Canadian goods
Canadian banks buying US currency
If Canadians begin to prefer U.S. goods over Canadian goods, what is the likely impact on the demand for U.S. dollars?
It decreases
It stays the same
It increases
It shifts to Canadian dollars
If Americans start to prefer Canadian products, how is the supply of U.S. dollars in the exchange market affected?
It decreases
It increases
It causes inflation
It stays the same
Canada experiences a higher rate of economic growth than the U.S. What is the likely impact?
Canadians will demand fewer imports
Demand for foreign currency decreases
Canadians will import more, increasing demand for foreign currency
Supply of Canadian dollars increases abroad
If the U.S. has a higher rate of growth than Canada, what happens to the supply of U.S. dollars?
It decreases
It increases
It stays constant
It becomes more volatile
When Canada has a higher inflation rate than the U.S., what is the expected effect on Canadian products?
They become more competitive
They become more expensive compared to U.S. goods
Demand for Canadian dollars increases
U.S. exports decrease
If the U.S. experiences a higher inflation rate than Canada, what will likely happen to Canadian exports?
U.S. consumers will buy less from Canada
Canadian exports become less competitive
Canadian goods become relatively cheaper for Americans
Canadian demand for U.S. goods increases
If the U.S. raises its interest rates while Canada’s remain the same, what will investors likely do?
Invest more in Canadian assets
Move funds to U.S. assets
Keep their money in cash
Buy more Canadian goods
When Canadian interest rates rise above U.S. rates, what is the likely effect on the Canadian dollar?
It depreciates
It stays the same
It appreciates due to increased investment
It becomes pegged to the U.S. dollar
What was the main goal of the GATT established under the Bretton Woods System?
Regulate oil prices
Control currency inflation
Reduce tariffs and increase trade
Replace the World Bank
What organization eventually replaced GATT?
NATO
United Nations
World Trade Organization (WTO)
European Union (EU)
What is the primary role of the IBRD (World Bank)?
Managing exchange rates
Monitoring inflation
Funding infrastructure projects
Regulating global oil supply
Which organization provides financial assistance and policy advice to countries in financial trouble?
WTO
IMF
GATT
UNDP
What does the IMF provide annually to each country as part of its monitoring role?
Gold reserves
Trade agreements
Report cards on economic performance
Currency exchange services
What is SDR (Special Drawing Rights) in the IMF system often referred to as?
Reserve currency
Paper gold
Trade surplus
Monetary inflation
The IMF acts as a lender of the last resort for:
Individuals
Banks
Countries
Corporations
What type of exchange rate system was implemented under Bretton Woods?
Floating exchange rate
Pegged exchange rate system
Cryptocurrency-based system
Barter system
Under the Bretton Woods system, countries had to fix the value of their currencies to:
The Euro or SDR
Silver or SDR
The US dollar or Gold
Oil or Bitcoin
