Econ Chapter 30

The inflation control target is meant to be __ to __ percent with a trend inflation at a __ percent midpoint

Two main benefits flow from adopting an inflation-control target:

Critics of inflation targeting fear that
1. By focusing on inflation, the Bank might permit ___
2. The Bank might permit_________

As the sole issuer of Canadian money, the Bank of Canada can decide to control

The operating band is the________________________. So the operating band is 50 basis points (0.5 percentage points) wide.

The purchase of government of Canada securities - Treasury bills and government bonds - by the bank of Canada or to a chartered bank or the public is

When the Bank of Canada lowers the overnight rate:
1. Other short-term interest rates and the exchange rate:
2. The quantity of money and the supply of loanable funds:
3. The long-term real interest rate:
4. Consumption expenditure, investment, and net exports:
5. Aggregate demand:
6. Real GDP growth and the inflation rate :

Equilibrium in the market for loanable funds determines the
long-term real interest rate, which equals the

The ripple effects that follow a change in the overnight rate
change three components of aggregate expenditure: