Question 1

Critics argue that the Bank of Japan was somewhat timid in its reaction to the global financial crisis that initiated in the United States in 2007. What is the Bank of Japan's response to that criticism?

Accepted Answer

The answer of Critics argue that the Bank of Japan...

Question 2

The three governing bodies of the European Central Bank (ECB)are the

Accepted Answer

The European Central Bank (ECB) is governed by three main bodies: the Governing Council, the General Council, and the Executive Board. The Governing Council is the main decision-making body, the General Council contributes to the ECB's advisory and coordination work, and the Executive Board is responsible for implementing monetary policy as defined by the Governing Council and managing the day-to-day operations of the ECB.

Question 3

What are the three most important functions of a nation's central bank?

Accepted Answer

The answer of What are the three most important functions...

Question 4

The Federal Reserve is part of the US Treasury.

Accepted Answer

The Federal Reserve, or the Fed, is the central bank of the United States and operates independently of the U.S. Treasury Department, which is responsible for government revenue and finance.

Question 5

The two major goals of Canadian monetary policy are __________ and __________.

Accepted Answer

The answer of The two major goals of Canadian monetary...

Question 6

The responsibilities of the European Central Bank include

Accepted Answer

The European Central Bank (ECB) is primarily responsible for the monetary policy of the Eurozone, conducting foreign exchange operations to ensure the stability of the euro, and maintaining the payments system to ensure smooth financial transactions within the Euro area.

Question 7

The primary responsibility of all central banks is monetary policy.

Accepted Answer

Central banks primarily manage monetary policy, which involves controlling the money supply and interest rates to achieve economic objectives like controlling inflation, managing employment levels, and maintaining financial stability.

Question 8

The Financial Services Act of 2012 made it clear that the Bank of England is now the main regulator of British financial markets.

Accepted Answer

The Financial Services Act of 2012 transferred the responsibility of regulating British financial markets from the Financial Services Authority (FSA) to the Bank of England.

Question 9

The entity responsible for making the monetary policy decisions in the European Central Bank is the

Accepted Answer

The Governing Council is the main decision-making body of the European Central Bank, responsible for formulating monetary policy for the euro area.

Question 10

Eight times a year, the Bank of Canada announces the key policy rates for the nation. These key rates refer to what?

Accepted Answer

The key policy rates announced by the Bank of Canada refer to the overnight interest rate, which is the interest rate at which major financial institutions borrow and lend one-day (or "overnight") funds among themselves. This rate is a significant monetary policy tool used by the Bank of Canada to influence overall economic activity and inflation.

Question 11

The Consumer Financial Protection Bureau (CFPB), launched in 2011, is housed under the Federal Reserve.

Accepted Answer

The Consumer Financial Protection Bureau (CFPB) was created in 2011 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and it operates within the framework of the Federal Reserve System.

Question 12

To achieve its goal of monetary stability, the Bank of England sets a target

Accepted Answer

The Bank of England, like many central banks, targets an inflation rate to achieve monetary stability, aiming to keep inflation low and stable. The specific target is often around 2% per year, which is considered conducive to fostering economic growth and stability without leading to excessive inflation or deflation.

Question 13

What can we learn from looking at the changes in the Federal Reserve's balance sheet between March 2007 and May 2013?

Accepted Answer

The answer of What can we learn from looking at...

Question 14

Until the implementation of the Financial Services Act of 2012, the United Kingdom had a three-part framework for regulation of its financial system, consisting of the Bank of England, the Treasury Department, and which other entity?

Accepted Answer

The Financial Services Authority (FSA) was a key component of the UK's financial regulatory framework before the Financial Services Act of 2012 restructured the system. The FSA was responsible for the regulation of financial services and markets, ensuring that businesses adhered to proper standards.

Question 15

The Bank of England has two primary responsibilities, which are __________ and __________.

Accepted Answer

The Bank of England's two primary responsibilities are ensuring monetary stability, which involves keeping inflation low and stable, and ensuring financial stability, which involves maintaining a stable and resilient financial system.

Quiz 8: Central Banks