When the Bank of Canada Wants to Lower the Real

question 84

Multiple Choice

When the Bank of Canada wants to lower the real interest rate in Canada,it announces a ________ overnight rate target (and the entire operating band around the overnight rate target shifts ______) .In response,the commercial banks ________ the market interest rates,particularly,the short-term rates,by a similar amount.

• A) higher;down;raise
• B) lower;up;lower
• C) lower;down;lower
• D) higher;up;raise
• E) lower;down;up

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Definitions:

Atlantic

Relating to the Atlantic Ocean, the second-largest of the world's oceanic divisions.

Bacterial Decomposition

The process by which bacteria break down organic material, such as dead organisms or waste, into simpler substances.

Organic Nitrogen

Nitrogen that is incorporated into organic compounds, a vital element for life processes within organisms.

Ammonia

A colorless gas with a pungent smell, NH3, used as a nitrogen source in fertilizers and as a cleaning agent.