Problem
1. What are the three functions that a commodity must fulfill to be useful as money?
2. Money is what money does. Explain.
3. Why is the intrinsic value of token money less than its face value?
4. What are near monies?
5. Are credit cards money? Explain.
6. Provide three key reasons why money has value.
7. Why is money considered to be debt?
8. What is fiat money?
9. What are the four main assets of Canada's chartered banks?
10. What are the two reasons that people want to hold money? In other words, what are the two types of demand for money?
11. Why is the transactions demand for money less than nominal GDP?
12. How does an increase in the price level affect the equilibrium rate of interest?
13. The Bank of Canada is the bankers' bank. Explain.
14. What are the five functions of the Bank of Canada? Which one is most important?
15. Identify the major items in the consolidated balance sheet of the Bank of Canada.
16. What is the goal of monetary policy?
17. Explain how the two principal tools of monetary policy are used.
18. Explain the impact of each of the following upon chartered bank reserves: (i) the Bank of Canada sells government bonds in the open market to private buyers; (ii) the chartered banks reduce their indebtedness to the Bank of Canada.