Which of the Following Is NOT Consistent with the Effects

question 88

Multiple Choice

Which of the following is NOT consistent with the effects on the economy of an increase in the overnight rate target by the Bank of Canada?

• A) Market interest rates increase.
• B) Real interest rates increase.
• C) The Canadian dollar appreciates.
• D) The growth of spending on domestic goods slows down.
• E) Output increases.

---

Definitions:

Future Value

The value of an investment at a specified date in the future that accounts for a specified rate of interest or rate of return.

Interest Rate

The amount charged by a lender to a borrower for the use of assets expressed as a percentage of the principal.

Trust Fund

A legal entity set up to hold property or assets for the benefit of another party, often managed by a trustee.

Rate of Return

The upward or downward adjustment in an investment's value through a defined span, represented as a fraction of the investment's initial expense.