Suppose the rare event occurs that a major Canadian commercial bank is on the verge of insolvency and collapse due to volatile world credit markets. The likely initial response is

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The most likely initial response is for the Bank of Canada to act as the "lender of last resort" and provide funds to the struggling bank to prevent its collapse. This has been the traditional role of the central bank in such situations. Option A correctly identifies this response. Option B is unlikely as the World Bank is not typically involved in the rescue of individual banks. Option C may be a possibility if the bank is unable to recover, but it is not the likely initial response. Option E is also a possibility but may not be realistic given the size and complexity of a major commercial bank.

Suppose the Rare Event Occurs That a Major Canadian Commercial