Suppose the Bank of Canada wants to raise short-term market interest rates.To do so,the Bank will

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The Bank of Canada can raise short-term market interest rates by increasing its target for the overnight rate. This is the interest rate at which banks lend and borrow funds from each other overnight. By increasing this rate, the cost of borrowing for banks increases, which can then lead to higher lending rates for consumers and businesses. Purchasing government securities in the open market, increasing the commercial banks' required reserves, adjusting the rate paid on Treasury bills, and lowering the reserve requirement can also have an impact on interest rates, but these actions do not specifically target short-term market interest rates.

Suppose the Bank of Canada Wants to Raise Short-Term Market