When the Bank of Canada finds it necessary to slow economic activity, it allows interest rates to fall.

Question

Quizplus · Accepted Answer

When the Bank of Canada wants to slow economic activity, it actually raises interest rates, not lowers them. This is because higher interest rates make borrowing more expensive, which reduces spending and investment in the economy. On the other hand, lower interest rates stimulate economic growth by making borrowing and spending more affordable.

When the Bank of Canada Finds It Necessary to Slow