If the Bank of Canada sets the overnight rate on the basis of inflation,then the Bank of Canada is following:

Question

Quizplus · Accepted Answer

Inflation targeting is a monetary policy strategy in which the central bank sets a target inflation rate and adjusts interest rates to achieve that target. If the Bank of Canada is setting the overnight rate on the basis of inflation, then it is following an inflation-targeting strategy. The other options (B, C, D) are not directly related to inflation targeting.

If the Bank of Canada Sets the Overnight Rate on the Basis