The tool most frequently used by the Bank of Canada to control inflation is through interest rates.

Question

Quizplus · Accepted Answer

When the Bank of Canada wants to control inflation, it can increase interest rates to make borrowing more expensive, slowing down spending and economic growth. Similarly, when it wants to stimulate the economy, it can lower interest rates to encourage borrowing and spending. Therefore, interest rates are the primary tool used by the Bank of Canada to control inflation.

The Tool Most Frequently Used by the Bank of Canada