THE ECONOMICS OF MONEY,BANKING, AND FINANCIAL MARKETS 435

CHAPTER 15 The Bank of Canada is the most independent of all Canadian government agencies What is the main difference between it and other government agencies that explains its greater independence? *9 How can the government directly influence the Bank of Canada? 10 How is the responsibility for monetary policy shared in the Eurosystem? *11 The theory of bureaucratic behaviour indicates that the Bank of Canada never operates in the public interest Is this statement true, false, or uncertain? Explain your answer Central Banks and the Bank of Canada 403 12 Why might eliminating the Bank s independence lead to a more-pronounced political business cycle? *13 The independence of the Bank of Canada leaves it completely unaccountable for its actions Is this statement true, false, or uncertain? Explain your answer 14 The independence of the Bank of Canada has meant that it takes the long view and not the short view Is this statement true, false, or uncertain? Explain your answer *15 Why did Canada show little interest in the establishment of a central bank during the first 60 or so years of Confederation? WEB EXERCISES Go to www.bankofcanada.ca and click on About the Bank Choose Management and Corporate Governance Write a short essay about the diversity of the twelve outside directors of the Bank of Canada s Board of Directors Go to the above site and click on Monetary Policy Then click on Reports and then choose Beige Book According to the summary of the most recently published book, is the U.S economy weakening or recovering? Go to www.federalreserve.gov and click on About The Fed Then click on The Federal Reserve System and then on Structure According to the Federal Reserve, what is the most important responsibility of the Board of Governors? Be sure to visit the MyEconLab website at www.myeconlab.com.This online homework and tutorial system puts you in control of your own learning with study and practice tools directly correlated to this chapter content On the MyEconLab website you will find the following appendix for this chapter: Appendix 15.1:The Price Stability Goal and the Nominal Factor