Which of the following best explains why the Bank of Canada does not use nominal GDP as an intermediate target?
A) Nominal GDP has little connection with Bank policy goals.
B) Nominal GDP is unaffected by open market operations.
C) The Bank has little direct control over nominal GDP.
D) None of the above.

Question

Quizplus · Accepted Answer

The Bank of Canada does not use nominal GDP as an intermediate target because it has little direct control over it. Nominal GDP is determined by various factors such as government policies, consumer behavior, and international trade, which are beyond the Bank's control. Therefore, using nominal GDP as an intermediate target would not be an effective tool for the Bank to achieve its policy goals.

Which of the Following Best Explains Why the Bank of Canada