The Economic Variables That the Bank of Canada Tries to Influence

question 50

Multiple Choice

The economic variables that the Bank of Canada tries to influence are ________ in the short run and ________ in the long run.

• A)the distribution of income; the unemployment rate
• B)real GDP; the path of the price level
• C)the distribution of income; economic efficiency
• D)real GDP; the exchange rate
• E)the exchange rate; the rate of inflation

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Definitions:

Reserve Requirements

Rules established by central banks that specify the lowest reserve amount that banks are required to maintain against customer deposits.

Checking Accounts

Bank accounts on which the account holder can draw checks against the money deposited.

Time Deposits

Banking or financial accounts that hold funds for a fixed period, during which the depositor cannot access their money without incurring a penalty.

Federal Banks

Centralized banking institutions established by a country to oversee the monetary system and implement national economic policies.