1			What is the name of the interest rate that the Bank of Canada charges to the commercial banks?
			A)	The prime rate
			B)	The commercial rate
			C)	The bank rate
			D)	The loan rate
2			What is the demand for money?
			A)	The same as the demand for income.
			B)	The transactions demand plus asset demand
			C)	The transactions demand minus asset demand
			D)	Whatever the Bank of Canada determines it to be
3			What is the effect of an increase in the money supply?
			A)	It will lower the interest rate
			B)	It will increase the interest rate
			C)	It will decrease the demand for money
			D)	It will decrease the quantity of investment spending
4			What is the effect of expansionary monetary policy?
			A)	The money supply increases, and interest rates rise.
			B)	The money supply increases, and interest rates fall.
			C)	The money supply decreases, and interest rates rise.
			D)	The money supply decreases, and interest rates fall.

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5			The table above contains data relating to the money market. Refer to this table to answer the following question. If the supply of money is $150, what is the value of the equilibrium interest rate?
			A)	4 percent
			B)	5 percent
			C)	6 percent
			D)	7 percent

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6			The table above contains data relating to the money market. Refer to this table to answer the following question. What are the implications if the current supply of money is $160 and the interest rate is 7 percent?
			A)	The interest rate will fall.
			B)	The interest rate will rise.
			C)	The asset demand will fall.
			D)	The transactions demand will fall.
7			Which of the following is the most important function of the Bank of Canada?
			A)	The collection and clearing of cheques among commercial banks
			B)	Regulating the supply of money
			C)	Holding the reserves of commercial banks
			D)	Issuing new currency
8			Suppose that in a particular economy M = 200, P =2, Q = 500, and V = 5. What is the value of nominal GDP?
			A)	200
			B)	400
			C)	500
			D)	1000
9			According to the Keynesian transmission process, what effect will an increase in the money supply have?
			A)	An increase in the interest rate, an increase in investment spending, and an increase in GDP
			B)	An increase in the interest rate, an increase in investment spending, and a decrease in GDP
			C)	An increase in the interest rate, a decrease in investment spending, and a decrease in GDP
			D)	A decrease in the interest rate, an increase in investment spending, and an increase in GDP
			E)	A decrease in the interest rate, a decrease in investment spending, and a decrease in GDP

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10			Refer to the figure above to answer this question. What does curve MD2 represent?
			A)	The asset demand for money
			B)	The transactions demand for money
			C)	The investment demand
			D)	The stock of money
			E)	The total demand for money