Suppose the Bank of Canada Lowers Its Target for the Overnight

question 70

Multiple Choice

Suppose the Bank of Canada lowers its target for the overnight interest rate and longer-term rates in the market fall as a result.Households' and firms' demand for new loans from the commercial banks would ________.In order to make the new loans,the commercial banks require more ________.

• A)rise; government securities
• B)fall; currency
• C)rise; cash reserves
• D)remain stable; excess reserves
• E)fall; excess reserves

---

Definitions:

Consumer Expectations

Consumer expectations refer to the anticipations or beliefs consumers have regarding the performance and quality of products and services they use.

Design Defects

Flaws in the planned design of a product that make it inherently unsafe or unfit for its intended use, potentially leading to liability for the manufacturers.

Design Defect

A flaw in the design of a product that makes it unsafe or unfit for its intended use.

Consumer Expectations Test

A legal standard used to determine product liability based on whether a product meets the ordinary expectations of a consumer.