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When the inflation rate decreasesdecreases, what happens to the overnight interest rate? A. The Bank of Canada does not adjust the overnight interest rate, as
When the inflation rate decreasesdecreases, what happens to the overnight interest rate? A. The Bank of Canada does not adjust the overnight interest rate, as it is the real interest rate that should be adjusted. B. The Bank of Canada adjusts the overnight interest rate downdown through open market purchasespurchases of bonds. C. The Bank of Canada can adjust the overnight interest rate either up or down, depending on the autonomous component of the real interest rate. D. The Bank of Canada adjusts the overnight interest rate upup to reduce reserves inreduce reserves in the banking system
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