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Suppose the Bank of Canada Reduces the Bank Rate

Question 52

Multiple Choice

Suppose the Bank of Canada reduces the Bank rate.This will cause


A) the interest rate to fall,the exchange rate to depreciate,and lending by banks to increase.
B) the interest rate to fall,the exchange rate to appreciate,and lending by banks to increase.
C) the interest rate to rise,the exchange rate to appreciate,and lending by banks to decrease.
D) the interest rate to rise,the exchange rate to depreciate,and lending by banks to decrease.

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