To Reduce Short-Term Market Interest Rates,the Bank of Canada Could

question 53

Multiple Choice

To reduce short-term market interest rates,the Bank of Canada could

• A)reduce its target for the overnight rate.
• B)decrease the commercial banks' reserves.
• C)decrease the money supply directly.
• D)adjust the rate paid on Treasury bills.
• E)reduce the commercial banks' reserve requirements.

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Definitions:

Foreign Exchange Risk

The potential for financial loss due to fluctuation in exchange rates affecting transactions in foreign currencies.

Spot Rate

The ongoing market cost at which a certain currency is being traded for instant delivery.

Balance Sheet

A balance sheet is a financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial condition.

Thai Baht

The official currency of Thailand, coded as THB and symbolized as ฿.