What central bank try to accomplish by reducing policy rate

Reference no: EM13995940

The diagram below depicts the overnight rates targeted by the Bank of Canada in recent years.

1) What was the central bank trying to accomplish by reducing the policy rate during the economic recession which lasted from the fourth quarter of 2008 to the second quarter of 2009?

2) Explain your answer using any two of the four transmission channels of monetary policy.

Reference no: EM13995940

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