Question :
41) Commercial banks in Canada prohibited by law from
A) accepting : 1384443
41) Commercial banks in Canada are prohibited by law from
A) accepting demand deposits.
B) issuing paper currency.
C) lending money to households and firms.
D) accepting term deposits.
E) settling inter-bank debts through a clearinghouse.
42) The financial crisis that occurred in 2007 and 2008 highlighted one of the crucial functions of commercial banks and other financial institutions in developed economies. A crucial function that ceased to work smoothly during this time, and contributed to the global recession that began in 2008, was
A) the acceptance of deposits from firms and households.
B) the joint regulation of financial markets.
C) the provision of credit to firms and households.
D) cheque clearing and collection.
E) the clearing of electronic transfers.
43) An example of “interbank activities” in the Canadian banking system is
A) banks pooling their money together to fund the operations of the Bank of Canada.
B) banks lending money to each other in order to meet daily cash requirements.
C) the joint regulation of financial markets.
D) the joint regulation of the money supply.
E) lender of last resort to the banking system.
44) The Canada Deposit Insurance Corporation (CDIC) was set up to protect
A) member financial institutions in case of non-payment of loans from borrowers.
B) member financial institutions in case of non payment of loans from the government.
C) depositors with Canadian dollar accounts in member institutions for up to a maximum of $100 000 per eligible deposit.
D) depositors with Canadian dollar accounts in any Canadian financial institution for up to a maximum of $100 000 per institution.
E) depositors of any currency in any Canadian financial institution for up to a maximum of $100 000 per institution.
45) Which of the following entries would appear on the liabilities side of the Bank of Canada’s balance sheet?
A) Government of Canada securities
B) deposits of commercial banks
C) advances to commercial banks
D) savings deposits
E) shareholders’ equity
46) Which of the following entries would appear on the assets side of a commercial bank’s balance sheet?
A) Government of Canada securities
B) chequable deposits
C) Government of Canada deposits
D) savings deposits
E) shareholders’ equity
47) Which of the following entries would appear on the liabilities side of a commercial bank’s balance sheet?
A) mortgage loans
B) Government of Canada securities
C) cash reserves
D) foreign currency reserves
E) demand deposits
48) Refer to Table 27-1. What are the total assets on the balance sheet of this commercial bank?
A) 2410
B) 2520
C) 2810
D) 2960
E) 3160
49) Refer to Table 27-1. What are the total liabilities on the balance sheet of this commercial bank?
A) 2410
B) 2520
C) 2810
D) 2960
E) 3160
50) A bank run is unlikely to occur in Canada today because
A) if necessary, the central bank can provide all the reserves that are necessary to avoid this situation.
B) the commercial banks are required by law to maintain 100% of their deposits in cash.
C) there is relatively little demand for cash at present.
D) banking is done mostly electronically.
E) the commercial banks hold enough government securities that are convertible into cash.
