The Bank of Canada Initially Implements a Contractionary Monetary Policy

question 38

Multiple Choice

The Bank of Canada initially implements a contractionary monetary policy by

• A)directly decreasing the money supply.
• B)raising its target for the overnight interest rate.
• C)selling government securities on the open market.
• D)buying government securities on the open market.
• E)reducing its target for the overnight interest rate.

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Definitions:

Concurrent Validity

The extent to which test scores correlate with scores from other assessments measuring the same construct at the same time.

Reliability

The level of consistency and stability in the results produced by an assessment instrument across time.

Validity

The extent to which a test accurately measures what it is intended to measure.

Correlation

A statistical measure that describes the extent to which two variables change together, but does not necessarily imply causation.