ECON201 Lecture Notes - Lecture 18: Open Market Operation, Monetary Base, Monetary Policy

• School: University of Waterloo
• Department: Economics
• Course: ECON201
• Professor: Predrag Rajsic

Document Summary

Chapter 14 central banks and bank of canada. 1. recognize the historical context of the development of the bank of canada. 2. describe the key features and functions of the bank of canada and assess its degree of independence. 3. summarize the arguments for and against the independence of the bank of. 4. identify the ways in which the theory of bureaucratic behaviour can help explain central bank actions. 5. discuss the structure and independence of other major central banks around the world. The original bank act required the bank to redeem notes in gold. Removed from the bank act revision of 1967. No longer constrained by the amount of gold, the bank now has unlimited power to issue legal tender. Monetary base - the sume of boc notes, coins, and depository institutions deposits at the boc. Changes in these deposits affect the amount of reserves in the banking system and the money supply. National payments system - electronic system that clears and settles payments.