chapter 6 part 2

Question 1

what are 2 ways fiscal policy effects the economy?

Answer 1

1. Spending - Government can buy goods and services directly for example to build a highway. this puts money into the economy or the government can give individuals money to spend or save themselves.
2. Taxes - Taxes generally reduce amount of activity in area being taxed.

Question 2

what are 5 types of taxes?

Answer 2

1. Direct tax - on individuals or companies
2. Sales taxes - on goods and services
3. Payroll tax
4. Capital taxes - levied on companies assets
5. Property tax

Question 3

who is on the board of directors for the bank of canada?

Answer 3

the governor
the senior deputy governor
and 12 Directors from outside the bank

Question 4

what are the 4 roles of the bank of canada according to the bank of canada act?

Answer 4

1. regulate credit and currency
2. control and protect the external value of currency
3. to mitigate is influence fluctuations to level of production, trade, prices and employment.
4. to promote economic and financial welfare.

Question 5

what are the 3 major functions of the bank of canada?

Answer 5

1. to act for the government in the issuance and removal of bank notes
2. to act as fiscal agent for the government. ( government advisor on debt management, foreign exchange and monetary policy.
3. to conduct monetary policy

Question 6

What are the roles of the bank of canada as fiscal agent

Answer 6

deposit accounts held with the bank of canada and other chartered banks
the exchange fund account

Question 7

what 3 things does the banking act empower the bank to do?

Answer 7

1. buy and sell gold, silver and foreign exchange.
2. maintain deposits
3. act as agent and depository for various banks and international institutions