In the Event of a Sudden Loss in Confidence in the Ability

Multiple Choice

In the event of a sudden loss in confidence in the ability of the commercial banks to redeem deposits,the Bank of Canada would probably

A) take over the operation of any banks in severe difficulties.
B) lend reserves to the commercial banks.
C) offer to sell government bonds to the chartered banks.
D) suspend operation of the banking system until the panic subsided.
E) impose severe financial penalties on the commercial banks by charging them interest at higher than the Bank rate.