In recent years, the Bank of Canada has:

Question

Quizplus · Accepted Answer

In recent years, the Bank of Canada has taken an activist, pragmatic approach to monetary policy, has a publicized target on the overnight lending rate and has adopted the inflation targeting strategy. Therefore, option D is the correct answer. Option A is incorrect because the Bank of Canada looks at both M1 and M2 when setting monetary targets. Option B is incorrect because the Bank of Canada uses both changes in the prime rate and open-market operations in establishing monetary policy. Option C is incorrect because the Bank of Canada adjusts its monetary policy according to the health of the economy, instead of increasing M2 at a fixed annual rate.

In Recent Years, the Bank of Canada Has