The key components of the framework in which the Bank of Canada conducts monetary policy are:
A) a surplus in the federal government's budget and a debt ratio target.
B) fixed exchange rates and no international capital mobility.
C) a firm agreement with the US and the EU on money supply growth rate targets.
D) flexible exchange rates and an inflation target.

Question

Quizplus · Accepted Answer

The Bank of Canada conducts monetary policy within a framework characterized by flexible exchange rates and an inflation target. This approach allows the central bank to adjust monetary policy to maintain price stability, which is crucial for economic well-being.

The Key Components of the Framework in Which the Bank