Which of the following interest rates does the Bank of Canada actually set?
A) Discount rate
B) Federal funds rate
C) Government bond rate
D) Commercial paper rate

Question

Quizplus · Accepted Answer

The Bank of Canada sets the discount rate as the interest rate at which eligible financial institutions can borrow short-term funds directly from the Bank, typically overnight. This is known as the "policy rate" or the "target for the overnight rate", which influences other interest rates in the economy, such as consumer and business loans, mortgages, and credit cards. The other options listed are influenced by market forces and set by other entities, such as the market participants or the government.

Which of the Following Interest Rates Does the Bank of Canada