Which of the following is NOT consistent with the effects on the economy of an increase in the overnight rate target by the Bank of Canada?
A) Market interest rates increase.
B) Real interest rates increase.
C) The Canadian dollar appreciates.
D) The growth of spending on domestic goods slows down.
E) Output increases.

Question

Quizplus · Accepted Answer

An increase in the overnight rate target by the Bank of Canada usually leads to a decrease in output (as spending slows down) and an appreciation of the Canadian dollar. The other options (A, B, and D) are consistent with the effects of an increase in the overnight rate target.

Which of the Following Is NOT Consistent with the Effects