Multiple Choice
Suppose the Bank of Canada raises its target for the overnight interest rate and longer-term rates in the market rise as a result.Households' and firms' demand for loans from the commercial banks would ________.In order to accommodate this change,the commercial banks require ________.
A) rise; more government securities
B) fall; more cash reserves
C) rise; more currency
D) remain stable; no change to their reserves
E) fall; fewer cash reserves
Correct Answer:
Verified
Correct Answer:
Verified
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