The two main monetary policy tools used by the Bank of Canada to implement monetary policy are

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The Bank of Canada primarily uses open market operations (buying and selling government securities) and lending to financial institutions to implement monetary policy. These tools allow the bank to control the money supply and influence interest rates in the economy. Tax rates are controlled by the government and are not a direct tool of the Bank of Canada, and changing the desired reserve ratio is a less commonly-used tool for implementing monetary policy. Printing money can lead to inflation and is not an effective long-term solution for managing the economy.

The Two Main Monetary Policy Tools Used by the Bank