Suppose the Actual Overnight Interest Rate Is 3

question 7

Multiple Choice

Suppose the actual overnight interest rate is 3.5%.If the Bank of Canada raises its target for the overnight interest rate to 4%,and longer-term interest rates in the market rise as a result,

• A)the demand for loans from commercial banks falls,the commercial banks sell government securities to the Bank of Canada,and the money supply falls.
• B)the demand for loans from commercial banks rises,the commercial banks buy government securities from the Bank of Canada,and the money supply falls.
• C)the demand for loans from commercial banks rises,the commercial banks sell government securities to the Bank of Canada,and the money supply rises.
• D)the demand for loans from commercial banks falls,the commercial banks buy government securities from the Bank of Canada,and the money supply falls.
• E)the demand for loans from commercial banks rises the commercial banks buy government securities from the Bank of Canada,and the money supply rises.

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Definitions:

Socioeconomic Systems

The structured ways societies organize and distribute economic resources and social status among their members.

Rational And Adaptive

Describes actions or behaviors that are both logical, based on reason and evidence, and beneficial for adjustment or effectiveness in responding to specific challenges or environments.

Biologically Adapted

The processes through which organisms develop traits over generations that better enable them to survive and reproduce in their specific environments.

High Altitude

A region located at a great height above sea level, often characterized by distinct ecological and physiological conditions.