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List the three reasons that the bank of canada

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1. Recall that the Bank of Canada adjusts the interest rate to stabilize the rate of inflation as well as the broader economy. It could do this by targeting the money supply or by directly targeting the interest rate.

List the three reasons that the Bank of Canada does not target the money supply.

2. As borrowers react to interest rate changes, how does the Bank of Canada passively accommodate the need to expand the money supply?

3. Suppose you and your employer are choosing your wage increases for the next five years. Does high or unpredictable inflation make this task difficult?

Reference no: EM132482884

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