If the Bank of Canada reduces the inflation rate from 5% to 3%,it is:

Question

Quizplus · Accepted Answer

Reducing the inflation rate is called disinflation, which is a deliberate policy action taken by the central bank to decrease the rate of inflation. This is done to bring price stability to the economy and prevent macroeconomic problems resulting from high inflation rates. Therefore, the correct choice is B, engaging in disinflation. The other options, following a policy rule, increasing employment, and raising economic growth, are not applicable in this scenario.

If the Bank of Canada Reduces the Inflation Rate from 5