Question

Which of the following is a function of Bank of Canada?

• A. controls and manages our country's debt.
• B. regulates and supervises our country's banks.
• C. controls and manages all financial resources in Canada.
• D. controls and manages Canada's country's money supply.

Answer 1

The correct option is D controls and manages Canada's country's money supply.

The Bank of Canada is the nation's central bank. Its principal role is "to promote the economic and financial welfare of Canada," as defined in the Bank of Canada Act. The Bank’s four main areas of responsibility are:

• Monetary policy: The Bank influences the supply of money circulating in the economy, using its monetary policy framework to keep inflation low and stable.
• Financial system: The Bank promotes safe, sound and efficient financial systems, within Canada and internationally, and conducts transactions in financial markets in support of these objectives.
• Currency: The Bank designs, issues and distributes Canada’s bank notes.
• Funds Management: The Bank is the "fiscal agent" for the Government of Canada, managing its public debt programs and foreign exchange reserves.