To Reduce Short- Term Market Interest Rates, the Bank of Canada

question 21

Multiple Choice

To reduce short- term market interest rates, the Bank of Canada could

• A)decrease the commercial banks' reserves.
• B)adjust the rate paid on Treasury bills.
• C)decrease the money supply directly.
• D)reduce the commercial banks' reserve requirements.
• E)reduce its target for the overnight rate.

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Definitions:

Catalog Price

The listed price of goods or services in a catalog, before any discounts or adjustments.

Perpetual Inventory System

An inventory accounting system that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Net Price Method

A pricing strategy taking into account all available discounts and rebates to determine the final purchase price.