The Policy of the Bank of Canada from April 2009

question 49

Multiple Choice

The policy of the Bank of Canada from April 2009 to May 2010 implies that reserves are relevant for

• A) the quantity of inside money but not outside money issued by the central bank.
• B) fiscal policy in addition to monetary policy.
• C) the quantity of outside money issued by the central bank.
• D) a case of adequate financial liquidity.
• E) aggregate supply.

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Definitions:

Straight-Line Depreciation

A process for dividing the expense of a tangible asset uniformly across its expected lifetime in annual segments.

Net Annual Operating

Typically refers to the net operating income or profit generated by a business over the course of a year, excluding non-operating revenues and expenses.

After-Tax Discount Rate

The rate used to discount future cash flows of an investment after taxes have been accounted for, reflecting the investor's required rate of return net of taxes.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term liquidity.