If the Bank of Canada Increases the Interest Rate Paid

question 40

Multiple Choice

If the Bank of Canada increases the interest rate paid on reserves, banks will tend to hold _____ excess reserves, which will _____ the money multiplier.

• A)more; increase
• B)more; decrease
• C)fewer; increase
• D)fewer; decrease

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Definitions:

Johannesburg Stock Exchange

The largest stock exchange in Africa, located in Johannesburg, South Africa, facilitating trade in stocks, bonds, and other financial instruments.

Companies Act

A set of laws and regulations that govern the formation, operation, and dissolution of companies, typically enacted by a country's legislature.

Shareholders

Individuals or entities that own one or more shares of stock in a corporation, giving them a portion of its ownership and sometimes rights to dividends and voting in corporate matters.

Hostile Takeover

An attempt by one company to acquire another without the agreement of the target company's management.