Suppose the Bank of Canada Is Targeting the Interest Rate

question 79

Multiple Choice

Suppose the Bank of Canada is targeting the interest rate when the demand for money increases.What is the proper monetary response in terms of the money supply?  

• A) decrease the money supply 
• B) keep the money supply constant 
• C) increase the money supply 
• D) stimulate inflation to increase the demand for money

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Definitions:

Vesicle

Saclike, membrane-enclosed organelle; different kinds store, transport, or break down their contents.

Fusion

The process of combining two or more entities into a single entity, often referring to the merging of atomic nuclei to form a heavier nucleus, releasing energy.

Cell Cortex

Reinforcing mesh of cytoskeletal elements under a plasma membrane.

Plasma Membrane

The plasma membrane is a semi-permeable lipid bilayer that encloses the cytoplasm of a cell, controlling the passage of substances in and out of the cell.