If the Bank of Canada attempts to continue reducing unemployment by manipulating monetary policy, which of the following would you expect to see?

Question

Quizplus · Accepted Answer

If the Bank of Canada attempts to continue reducing unemployment by manipulating monetary policy, it is likely to follow inflationary monetary policies. This is because expansionary monetary policies help to increase aggregate demand, which in turn increases spending, output, and employment. However, this can also lead to inflationary pressures as prices rise due to increased demand. Therefore, the Bank of Canada will have to carefully balance its goals of reducing unemployment while keeping a check on inflation.

If the Bank of Canada Attempts to Continue Reducing Unemployment