Read this article (https://www.bankofcanada.ca/2021/04/understanding-policy-interest-rate/) about understanding policy interest rate and answer the following. (40 points)

a. Provide a definition for policy interest rate, bank rate, and deposit rate and operating bond? Which of them is set by central bank and which of them is set by commercial banks? What is the role of each of them in changing supply of money? b. What does change in the policy rate mean for public? c. Why does central bank change the target for policy rate?

Read this article (https://www.bankofcanada.ca/2020/12/understanding-quantitative-easing/) about understanding quantitative easing and answer the following. (40 points)

a. How is this approach different from changing policy rate? b. How does asset purchasing programs affect bond prices and the bond yields? c. How does asset purchasing programs change the balance sheet of the central bank?

When the central bank buys and sells bonds through open-market operations, the money supply changes, but there is no effect on the money supply when individuals buy and sell bonds. Explain. (20 points)