The Tools of Monetary Policy Include All of the Following

question 22

Multiple Choice

The tools of monetary policy include all of the following except

• A)open market operations.
• B)discount rate.
• C)reserve requirements.
• D)prime interest rates.

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Definitions:

Inflation Rate

The velocity at which there is a general increase in the cost of goods and services, thereby reducing the effective purchasing capability.

Compound Interest CSB

The calculation of interest on a Canada Savings Bond (CSB) where interest earned also earns interest over time.

Redemption Value

The value at which a bond or other debt instrument can be redeemed before its maturity by the issuer.

Compound-Interest GIC

A Guaranteed Investment Certificate (GIC) where interest is compounded periodically and added to the principal balance, leading to interest earnings on interest.