When the Bank of Canada Changes Its Key Official Interest

question 112

Multiple Choice

When the Bank of Canada changes its key official interest rate,in response the commercial banks in the country

• A) change market interest rates (particularly short-term ones)by the same amount and in the same direction.
• B) change market interest rates (particularly short-term ones)by the same amount in the opposite direction.
• C) leave market interest rates unchanged (particularly short-term ones).
• D) change only the prime business rate they charge their least risky customers.
• E) leave the prime business rate unchanged.