The Bank of Canada establishes a rate at which they will lend to commercial banks and a rate at which they will borrow from commercial banks.By doing so,
A) the Bank of Canada can ensure that the actual overnight interest rate will never fall below 2%.
B) the Bank of Canada can ensure that the commercial banks will not be earning excess profits.
C) the Bank of Canada can ensure that money demand remains at the level necessary for monetary equilibrium.
D) the Bank of Canada establishes a spread,into which all interest rates in the economy fall.
E) the Bank of Canada can ensure that the actual overnight interest rate will fall between these two interest rates.
Correct Answer:
Verified
Q19: Most central banks,including the Bank of Canada,implement
Q20: Loans from the Bank of Canada are
A)made
Q21: Suppose the Bank of Canada lowers its
Q22: Suppose the actual overnight interest rate is
Q23: When the Bank of Canada enters the
Q25: The interest rate that the Bank of
Q26: Suppose the Bank of Canada raises its
Q27: Suppose the Bank of Canada announces its
Q28: The amount of currency in circulation in
Q29: Suppose the Bank of Canada lowers its
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents