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8. The bank rate and the overnight rate The bank rate is the interest rate on loans that the Bank of Canada makes to banks.

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8. The bank rate and the overnight rate The bank rate is the interest rate on loans that the Bank of Canada makes to banks. Banks occasionally borrow from the Bank of Canada when they find themselves short on reserves. A lower bank rate V banks' incentives to borrow reserves from the Bank of Canada, thereby V the quantity of reserves in the banking system and causing the money supply to V The overnight rate is the interest rate that banks charge one another for shortterm (typically overnight) loans. When the Bank of Canada uses openrmarket operations to buy government bonds, the quantity of reserves in the banking system V , banks' demand for borrowed reserves V , and the overnight rate V . te is the interest rate on loans that the Bank of Canada makes to banks. Banks occasionally borrow from t ves short on reserves. A lower bank rate banks' incentives to borrow reserves from the Ba V the quantity of reserves in the banki d causing the money supply to increases ght rate is the interest rate that banks cha decreases ther for short-term (typically overnight) loans. When et operations to buy government bonds, the quantity or reserves in the banking system bar , and the overnight rateThe bank rate is the interest rate on loans that the Bank of Canada makes to banks. Banks occasionally b find themselves short on reserves. A lower bank rate banks' incentives to borrow reserve the quantity of reserves in the banking system and causing the money supply to increasing at rate is the interest rate that banks charge one another for short-term (typically overnight) reducing operations to buy government bonds, the quantity of reserves in the banking system , and the overnight rateate on loans that the Bank of Canada makes to banks. Banks occasionally borrow from the Bank of Canada when they es. A lower bank rate banks' incentives to borrow reserves from the Bank of Canada, thereby of reserves in the banking system and causing the money supply to rest rate that banks charge one another for short-term (typically ove rise oans. When the Bank of Canada uses y government bonds, the quantity of reserves in the banking system fall , banks' demand for borrowed he overnight ratehe Bank of Canada makes to banks. Banks occasionally borrow from the Bank of Canada when they rate banks' incentives to borrow reserves from the Bank of Canada, thereby banking system and causing the money supply to decreases increases ks charge one another for short-term (typically ove When the Bank of Canada uses ds, the quantity of reserves in the banking system , banks' demand for borrowedThe bank rate is the interest rate on loans that the Bank of Canada makes to banks. Bar find themselves short on reserves. A lower bank rate banks' incentives the quantity of reserves in the banking system and causing the money rises The over is the interest rate that banks charge one another for short-term (ty declines open-ma ons to buy government bonds, the quantity of reserves in the bankin reserves , and the overnight rateThe bank rate is the interest rate on loans that the Bank of Canada makes to bank find themselves short on reserves. A lower bank rate banks incent the quantity of reserves in the banking system and causing the m decreases The overnight rate is the interest rate that ban e another for short-ter increases open-market operations to buy government bon tity of reserves in the b reserves , and the overnight rate

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