In Practice,the Bank of Canada Uses Monetary Policy to Reduce

question 35

Multiple Choice

In practice,the Bank of Canada uses monetary policy to reduce undesirable fluctuations in real GDP by

• A)controlling business investment expenditures directly.
• B)controlling government spending.
• C)influencing market interest rates through changes in its target for the overnight interest rate.
• D)directly influencing the money supply which affects the interest rate and hence,consumption and investment.
• E)targeting the money supply directly.

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