Question

question 3 (1 point)
the channel/corridor system for setting interest rates ________.
enables the central bank to set the overnight, policy rate
limits the amount banks can borrow from the central bank
is not appropriate for canadian monetary policy
is being phased out as a monetary policy tool

Explanation:

The channel/corridor system is a framework where the central bank sets a target interest rate (the overnight, policy rate). It has a deposit rate (floor) and a lending rate (ceiling). Banks have incentives to trade at the policy rate. The other options are incorrect: it doesn't limit borrowing amount (it's about rate setting), it is used in Canadian monetary policy, and it's not being phased out.

Answer:

Enables the central bank to set the overnight, policy rate