What is the problem associated with the Bank of Canada targeting money supply as a method of monetary policy?
A)Interest rates will be too low and create a recession.
B)Interest rates will fluctuate depending on the demand for money.
C)The Bank of Canada will print too much money.
D)Interest rates will be too low and increase prices.

Question

Quizplus · Accepted Answer

When the Bank of Canada targets the money supply, interest rates can fluctuate as they are determined by the demand for money, which can lead to instability in the economy.

What Is the Problem Associated with the Bank of Canada