When the ________ has an interest rate target, ________ output might lead to a ________ money supply.
A) Bank of Canada; higher; higher
B) Bank of Canada; higher; lower
C) Ministry of Finance; higher; higher
D) Ministry of Finance; lower; lower

Question

Quizplus · Accepted Answer

When the Bank of Canada (or any central bank) targets an interest rate and aims to support higher output, it might do so by increasing the money supply. This is because a higher money supply can lead to lower interest rates, stimulating borrowing and investment, thereby supporting higher economic output.

When the ________ Has an Interest Rate Target, ________ Output

When the Has an Interest Rate Target, Output