If the Bank of Canada raises its target for the overnight interest rate, this indicates that

Question

Quizplus · Accepted Answer

When the Bank of Canada raises its target for the overnight interest rate, it indicates that the bank is pursuing a contractionary monetary policy. This means that the bank is trying to reduce inflation by decreasing the money supply and making borrowing more expensive for consumers and businesses. By increasing interest rates, the Bank of Canada hopes to slow down economic growth and curb inflationary pressures.

If the Bank of Canada Raises Its Target for the Overnight