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Interest rate the size of the money supply

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In Canada, the Bank of Canada uses the interest rate, not the money supply, as its monetary policy instrument. As a result, when the Bank of Canada sets its interest rate the size of the money supply is determined by:

A) the real interest rate and level of business investment expenditure.

B) the commercial banks operating to maximize profit.

C) the demand for money balances in the money market.

D) the government sector's budget surplus or deficit.

Reference no: EM132335762

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