72. How does the Overnight Rate Target influence interest rates throughout the econ- omy? (A) The Overnight Rate is the interest rate that banks use to borrow from each other Therefore, the interest rates banks offer to the wider public are set with respect to this. (B) It shifts the demand for money to the right, increasing its equilibrium value. (C) It shifts the demand for money to the left, reducing its equilibrium value. (D) The Bank of Canada has no influence, direct or indirect, on interest rates per se this is more a function of government policy.
72. How does the Overnight Rate Target influence interest rates throughout the econ- omy? (A) The Overnight Rate is the interest rate that banks use to borrow from each other Therefore, the interest rates banks offer to the wider public are set with respect to this. (B) It shifts the demand for money to the right, increasing its equilibrium value. (C) It shifts the demand for money to the left, reducing its equilibrium value. (D) The Bank of Canada has no influence, direct or indirect, on interest rates per se this is more a function of government policy.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
72
Transcribed Image Text:72. How does the Overnight Rate Target influence interest rates throughout the econ-
omy?
(A) The Overnight Rate is the interest rate that banks use to borrow from each other.
Therefore, the interest rates banks offer to the wider public are set with respect to
this.
(B) It shifts the demand for money to the right, increasing its equilibrium value.
(C) It shifts the demand for money to the left, reducing its equilibrium value.
(D) The Bank of Canada has no influence, direct or indirect, on interest rates per se;
this is more a function of government policy.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education