In practice, the Bank of Canada

Question

Quizplus · Accepted Answer

The Bank of Canada targets inflation, but it also takes into account real economic activity when making monetary policy decisions. This approach is often referred to as a "flexible inflation targeting" framework, where the central bank aims to keep inflation within a certain range while also paying attention to other economic indicators such as GDP growth and unemployment. This is different from option A and D, which are not accurate descriptions of the Bank of Canada's approach, and option E, which suggests that the central bank only focuses on anticipated future inflation rather than a broader range of economic indicators. Option B is technically true in that the Bank of Canada, like the U.S. Federal Reserve, has a dual mandate of promoting price stability and full employment, but option C is a more complete and accurate description of the central bank's approach.

In Practice, the Bank of Canada