The Policy Tools Used by the Bank of Canada Include

question 54

Multiple Choice

The policy tools used by the Bank of Canada include

• A)prime rate and bank rate.
• B)the operating band and open market operations.
• C)open market operations and prime rate.
• D)prime rate and the exchange rate.
• E)the exchange rate and open market operations.

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Definitions:

Fixed Costs

Expenses that remain constant regardless of business activity levels, including lease payments and insurance premiums.

Short Run

A period in which at least one factor of production is fixed and cannot be changed, limiting the firm's ability to adjust fully to market changes.

Monopolistically Competitive

A market structure characterized by many sellers offering differentiated products, allowing for some degree of market power.

Fixed Costs

Costs that do not vary with the level of output or production, such as rent, salaries, and equipment maintenance.