Suppose the Bank of Canada Raises Its Target for the Overnight

question 14

Multiple Choice

Suppose the Bank of Canada raises its target for the overnight interest rate from 3% to 3.25%,while interest rates in other countries do not change.How will this policy action affect Canada's imports and exports?

• A)The Canadian dollar will appreciate and encourage imports into Canada.
• B)The Canadian dollar will appreciate and encourage Canada's exports.
• C)The Canadian dollar will depreciate and discourage Canada's exports.
• D)The Canadian dollar will depreciate and encourage imports into Canada.
• E)The Canadian dollar will appreciate and discourage imports into Canada.

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Definitions:

Thomas Paine

An influential English-born writer and philosopher known for his works "Common Sense" and "The American Crisis," which advocated for American independence.

Common Sense

A pamphlet anonymously written by Thomas Paine in January 1776 that attacked the English principles of hereditary rule and monarchical government.

Background

The circumstances or situations that form the setting for an event, statement, or idea, and in terms of which it can be fully understood and assessed.

True Liberty

The freedom experienced in society, absent of authoritarian limits on personal behavior, lifestyle choices, or political opinions.