If the Rate of Inflation Is Expected to Fall Below

question 30

Multiple Choice

If the rate of inflation is expected to fall below the target range of 1 to 3 percent, the Bank of Canada will

• A)increase the target for the overnight interest rate.
• B)decrease the exchange rate for the Canadian dollar.
• C)increase their demand for Canadian dollars.
• D)decrease the target for the overnight interest rate.
• E)engage in sale and repurchase agreements with commercial banks.

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