Which of the following is true about the Bank of Canada and its ability to prevent recessions? The Bank of Canada
A)does not try to eliminate recessions, but instead focuses on preventing inflation.
B)can fine tune the economy and realistically hope to keep the economy from experiencing recessions.
C)cannot realistically fine tune the economy, but seeks to keep recessions shorter and milder than they would otherwise be.
D)cannot realistically fine tune the economy and has little to no effect on the magnitude and length of recessions.
E)due to recent innovations in monetary policy the Bank of Canada can prevent all but the most severe recessions.

Question

Quizplus · Accepted Answer

The Bank of Canada cannot realistically fine tune the economy and prevent all recessions, but it seeks to keep recessions shorter and milder than they would be without its actions. This is achieved through the Bank's monetary policy, which aims to influence the economy's overall level of spending and borrowing. The Bank can adjust interest rates to stimulate or cool down the economy, but it cannot entirely eliminate economic downturns.

Which of the Following Is True About the Bank of Canada