Assume that the Bank of Canada uses its available tools to push down interest rates. Economic activity should increase as a result.

Question

Quizplus · Accepted Answer

When the Bank of Canada uses its available tools to push down interest rates, it becomes cheaper for businesses and households to borrow money, which should stimulate spending and economic activity in the short term. This is because lower interest rates encourage borrowing and investment, which increases demand for goods and services, and thus stimulates economic growth.

Assume That the Bank of Canada Uses Its Available Tools