If the Bank of Canada is concerned with recession it will ________ the overnight loans rate to ________.
A)raise; increase aggregate demand
B)lower; increase aggregate demand
C)raise; decrease aggregate demand
D)lower; decrease aggregate demand
E)lower; increase potential GDP

Question

Quizplus · Accepted Answer

Lowering the overnight loans rate makes borrowing cheaper, encouraging spending and investment, which increases aggregate demand and helps counteract a recession.

If the Bank of Canada Is Concerned with Recession It