If the Overnight Rate of Interest Is Higher Than the Equilibrium

question 92

Multiple Choice

If the overnight rate of interest is higher than the equilibrium interest rate,the Bank of Canada will _____ Treasury bills in the open market,_____ the supply of money,and _____ the interest rate to the target rate.

• A) sell;increase;lower
• B) buy;increase;lower
• C) sell;decrease;raise
• D) buy;decrease;raise

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Definitions:

Objectives

Specific, measurable goals that are established to guide efforts towards achieving broader aims.

Priorities

The ranking of tasks or objectives in order of importance or urgency for the purpose of guiding decision-making or action.

Demands

Demands represent the requirements or needs that individuals or groups expect to be fulfilled.

Constraints

Limitations or restrictions that affect decision-making, strategies, and the achievement of objectives.