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

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?

Please provide a comprehensive response. Thanks!

Answer rating: 100% (QA)

Understanding Policy Interest Rates A Key Tool for Economic Stability Based on the Bank of Canada BoC article you linkedheres a breakdown of the key t... View the full answer