If the Bank of Canada wants to influence real economic variables in the short run,it uses

Question

Quizplus · Accepted Answer

The Bank of Canada primarily uses its policy instrument- the overnight interest rate target- to influence aggregate demand in the short run. This is because changes in the interest rate affect borrowing and spending by households and businesses, which in turn affects overall demand in the economy. The other options listed may also have some impact on the economy, but they are not the primary policy tools used by the Bank of Canada for short-run economic stabilization.

If the Bank of Canada Wants to Influence Real Economic