The Amount of Currency in Circulation in the Canadian Economy

question 87

Multiple Choice

The amount of currency in circulation in the Canadian economy is described as being endogenous to the system.This description is appropriate because

• A)the process of deposit creation by the commercial banks is determined by the Bank of Canada.
• B)the commercial banks determine the currency in circulation in response to the Bank of Canada's changes to the money supply.
• C)the Bank of Canada conducts its open-market operations in response to the changing demand for cash from the commercial banks.
• D)the Bank of Canada targets the money supply directly.
• E)the Bank of Canada targets the currency in circulation directly.

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Definitions:

Self-fulfilling Prophecy

A belief or expectation that causes itself to become true, merely because the belief influences behavior towards making it happen.

Employees

Individuals who are hired by a business or organization to perform specific duties in exchange for compensation.

Attribution Theory

A theory that explains how individuals infer the causes of their own and others' behaviors and events.

Selective Attention

The focusing of conscious awareness on a particular stimulus while ignoring others, essential in processing information efficiently.