The policy tools used by the Bank of Canada include
A)prime rate and bank rate.
B)the operating band and open market operations.
C)open market operations and prime rate.
D)prime rate and the exchange rate.
E)the exchange rate and open market operations.

Question

Quizplus · Accepted Answer

The operating band and open market operations are two policy tools used by the Bank of Canada. The operating band refers to a range of interest rates that the Bank uses to guide short-term interest rates in the market, while open market operations involve buying and selling government securities to influence the money supply and adjust interest rates accordingly. The other options listed may also be influenced by the Bank, but they are not direct policy tools that it uses to achieve its monetary policy goals.

The Policy Tools Used by the Bank of Canada Include