The key policy instrument employed by the Bank of Canada is control over
A) tax rates.
B) spending rates.
C) GDP growth rates.
D) population growth rates.
E) interest rates.

Question

Quizplus · Accepted Answer

The Bank of Canada uses control over interest rates as its key policy instrument. By adjusting the target for the overnight rate, the Bank of Canada can influence the borrowing and lending rates throughout the economy, which in turn affects the level of economic activity and inflation.

The Key Policy Instrument Employed by the Bank of Canada