The Bank of Canada has a great deal of control over the ________,but has less control over the ________ or the ________.

Question

Quizplus · Accepted Answer

The Bank of Canada has direct control over the overnight rate, which is the interest rate at which major financial institutions borrow and lend money to each other overnight. It also has some influence over long-term government bond rates, but these are largely determined by market forces such as inflation expectations and global economic conditions. The rate on bonds issued by corporations is also determined by market forces and is influenced by factors such as creditworthiness and demand for the specific bond. Therefore, the Bank of Canada has less control over these rates compared to the overnight rate and long-term government bond rates.

The Bank of Canada Has a Great Deal of Control