Reference no: EM133027878

Question - The Bank of Canada is expected announce its next monetary policy report on July 14, 2021. In the last meeting, the Bank decided to keep the key target interest rate on hold at 0.25%. The rate has been on hold at its rock-bottom level since the onset of the pandemic last year and the central bank has said it won't increase the rate until the economy has recovered. Recent data indicates that inflation has been picking up more than 3.4% while the unemployment rate remaining at an elevated level. If you are one of the Board of Governors of the Bank of Canada, what would be three KEY OBJECTIVES you would suggest the Bank of Canada to pursue while conducting monetary policy? Given the recent inflation and unemployment numbers, what would be your advice to the Bank on July 14, 2021, i.e., keep the rate on hold at 0.25%, or increase the rate to more than 0.25%, or lower the rate below 0.25%? How does the Bank of Canada make sure that the interest rate remains at the target level? Please explain your answer GRAPHICALLY and as succinctly as you can.