Monetary policy changes in Canada typically involve changes to
A) reserve-deposit ratios.
B) the bank rate.
C) open-market purchases.
D) the key policy rate.
E) market interest rates.

Question

Quizplus · Accepted Answer

Monetary policy changes in Canada typically involve changes to the key policy rate, which is also known as the overnight rate. This rate is set by the Bank of Canada and affects the interest rates that banks offer to their customers. When the key policy rate is increased or decreased, it can impact borrowing and spending throughout the economy.

While the other options listed can also be tools used in monetary policy, they are not typically the primary focus of changes in Canada. For example, reserve-deposit ratios are set by banks themselves, and open-market purchases involve the Bank of Canada buying or selling government securities to influence the money supply. These actions can impact interest rates, but they are not the primary way that monetary policy changes are made in Canada.

Monetary Policy Changes in Canada Typically Involve Changes to