Which of the Following Is the Bank of Canada Implementing

question 124

Multiple Choice

Which of the following is the Bank of Canada implementing when it tightens the money supply by selling government securities or raising interest rates?

• A) fiscal reduction strategy
• B) contractionary policy
• C) retrenchment strategy
• D) shrinkage policy

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Definitions:

Borrowed

Refers to funds or resources obtained temporarily from another party, usually with the promise of repayment plus interest.

Final Payment

The last installment paid in a series of payments, concluding the payment obligation under a financial agreement.

Interest Annually

A method where interest is calculated once every year and added to the principal sum, affecting the total amount of interest earned or paid over the life of the loan or investment.

Annual Rate

The interest rate over a year's time, often used in financial contexts to describe the yield of an investment or the cost of a loan.