Multiple Choice
The Bank of Canada chooses to influence interest rates directly rather than influencing the money supply directly because
A) the former method does not require knowledge of the position of the money demand curve.
B) the deposit creation mechanism in the banking system is outside the full control of the Bank of Canada.
C) it is easier to communicate policy actions to the public by setting the interest rate.
D) the former method does not require knowledge of the slope of the money demand curve.
E) all of the above.
Correct Answer:
Verified
Correct Answer:
Verified
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