Part 1: Panel A of the chart represents: the Canadian Payments Systemthe money marketthe Large Value Transfer Marketthe overnight lending marketthe financial marketClick for List and Panel B represents: the Large Value Transfer Marketthe overnight lending marketthe Canadian Payments Systemthe money marketthe financial marketClick for List

Part 2: In panel A, the Bank of Canada pays Banks with a positive balance at the close of payments settlement: %. (Note: Two decimal places. Don't include the percent sign in your answer).

Part 3: In panel A, the Bank of Canada publicly announces a target rate of: %. (Note: Two decimal places. Don't include the percent sign in your answer).

Part 4: The Bank of Canada will advance funds to Banks at what rate? %. (Note: Two decimal places. Don't include the percent sign in your answer).

Part 5: What is the equilibrium interest rate in Panel A? %. (Note: Two decimal places. Don't include the percent sign in your answer).

Part 6: If the Demand for Reserves (R^D) increases and shifts right (shown by the higher curve highlighted in red), the interest rate in this market will be at most: %. (Note: Two decimal places. Don't include the percent sign in your answer).

Part 7: If the Demand for Reserves (R^D) falls and shifts left (shown by the lower curve highlighted in red), the interest rate in this market will be at least: %. (Note: Two decimal places. Don't include the percent sign in your answer).

Part 8: In Panel B, the interest rate r* represents: banks' premium rate for most credit-worthy clients.the trend-setting interest rate for the economy.the average rate the Bank of Canada charges the banks for funds.the short-term rate in the money marketthe average rate the banks charge each other for funds.Click for List

Part 9: From panels A and B: the demand for reserves in panel A drives the demand for money in panel B.the relationship between interest rates in the two markets is an empirical issue and requires data analysis.it's part of Bank of Canada's policy objective to separate the two markets from each other.interest rates in the two markets are determined independently since different types of funds are traded. the demand for money in panel B drives the demand for reserves in panel A.Click for List

Panel A Panel B RD r MS 1.35% R$ r" 0.75% 0.55% MP(P,Y) NBR Quantity of Reserves Quantity of Money Panel A Panel B RD r MS 1.35% R$ r" 0.75% 0.55% MP(P,Y) NBR Quantity of Reserves Quantity of Money