How Can the Bank of Canada Use the Bank Rate

question 96

Multiple Choice

How can the Bank of Canada use the bank rate to regulate the overnight loans rate?

• A)The overnight loans rate is set at a quarter percentage point above the bank rate, which in turn is set by the Bank of Canada.
• B)The bank rate is set at the settlement balances rate plus 0.25 percentage points.
• C)The bank rate is set at 0.25 percentage points below the settlement balances rate, which is used to determine the overnight loans rate.
• D)The overnight loans rate is set at 25 basis points above the bank rate.
• E)The bank rate is set at the target overnight rate plus 0.25 percentage points.

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Definitions:

Quantity

The amount or number of material or immaterial things considered as a unit.

Sum

The total obtained by adding together a set of numbers or quantities.

Restriction

A limitation or condition that confines or restricts something's scope or action.

Quantity

The amount or number of a material or item required or available, often used in inventory management and production planning.