On which of the following does the Bank of Canada have the tightest grip?
A) the prime rate
B) the overnight rate
C) the mortgage rate
D) the credit card rate

Question

On which of the following does the Bank of Canada have the tightest grip?  
A) the prime rate 
B) the overnight rate 
C) the mortgage rate 
D) the credit card rate

Quizplus · Accepted Answer

The Bank of Canada has the tightest grip on the overnight rate. This is because the overnight rate is the interest rate at which banks lend and borrow money from each other on a daily basis. The Bank of Canada uses the overnight rate as a tool to influence the overall level of interest rates in the economy, which in turn affects borrowing and spending by households and businesses. The prime rate, mortgage rate, and credit card rate are all influenced by the overnight rate, but ultimately set by individual financial institutions.

On Which of the Following Does the Bank of Canada