If the Bank of Canada Raises Its Target for the Overnight

question 239

Multiple Choice

If the Bank of Canada raises its target for the overnight interest rate, this indicates that

• A)the Bank of Canada is pursuing an expansionary monetary policy.
• B)the Bank of Canada is pursuing a contractionary monetary policy.
• C)the Bank of Canada is attempting to combat deflation.
• D)the Bank of Canada is concerned that the growth in aggregate demand is too slow to keep up with potential GDP.
• E)the Bank of Canada is attempting to reduce the value of the Canadian dollar on foreign exchange markets.

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