Suppose the Bank of Canada Raises Its Target for the Overnight

question 40

Multiple Choice

Suppose the Bank of Canada raises its target for the overnight interest rate from 3% to 3.25%,while interest rates in other countries do not change.The result will be

• A)an inflow of financial capital,a decrease in demand for Canadian dollars,and a depreciation of the Canadian dollar.
• B)an inflow of financial capital,an increase in demand for Canadian dollars,and a depreciation of the Canadian dollar.
• C)an inflow of financial capital,an increase in demand for Canadian dollars,and an appreciation of the Canadian dollar.
• D)an outflow of financial capital,an increase in demand for Canadian dollars,and an appreciation of the Canadian dollar.
• E)an outflow of financial capital,a decrease in demand for Canadian dollars,and a depreciation of the Canadian dollar.

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Definitions:

Segmented Body

A body divided into repeated sections or segments, characteristic of certain animals like worms and arthropods.

Mesoderm

The middle layer of an embryo in early development, which gives rise to muscles, bones, and the circulatory system among other structures.

Ectoderm

The outermost layer of cells or tissue of an embryo, giving rise to the outer skin layer, nervous system, and various sensory organs.

Endoderm

The innermost layer of cells or tissues of an embryo in early development, or the lining of the digestive and respiratory tracts in the mature organism.