When the Bank of Canada increases the overnight rate,banks are likely to increase their lending,and the money supply increases.

Question

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When the Bank of Canada increases the overnight rate, it becomes more expensive for banks to borrow money from the central bank. As a result, banks may increase their lending rates to maintain their profit margins, which can lead to a decrease in borrowing and a decrease in the money supply.

When the Bank of Canada Increases the Overnight Rate,banks Are