If the actual interest rate is below the target rate,the Bank of Canada should decrease the money supply.

Question

Quizplus · Accepted Answer

If the actual interest rate is below the target rate, it means that there is an excess supply of money, and this can lead to inflationary pressures. To address this, the Bank of Canada can decrease the money supply by selling securities or increasing the reserve requirements of banks, which can help to increase interest rates and reduce inflationary pressures.

If the Actual Interest Rate Is Below the Target Rate,the