Bank of Canada Flashcards
1
Q
Functions of the BOC
A
BOC provides $ to banks in order to meet unexpected withdrawals
► prevent bank run and increase public confidence
… supervises all banks
► ensure sound banking in order to increase public confidence
… acts as a bank for banks
► clear checks
… regulates the flows of Money
► promote stability and growth
2
Q
As reserves increase, the money supply goes up, why?
A
As banks hold more reserves, they are willing to make more loans
3
Q
As BOC buys goct securities…
A
Prices increase and interest rate decrease
4
Q
Monetary policy: goal
A
Promote growth/employment, stabilize price level
5
Q
A
