Homework Answers
Answer: Option (d) Overnight Lending rate
The Bank of Canada’s only policy instrument is the target it sets for the overnight interest rate.
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The Bank of Canada often communicates its intentions to tighten or loosen monetary policy by announcing...
14. On March 13th, 2020 the Bank of Canada announced a 0.5% reduction in its trend-setting...
14. On March 13th, 2020 the Bank of Canada announced a 0.5% reduction in its trend-setting overnight lending rate from 1.25% to 0.75%. Is this monetary policy or fiscal policy and what is the Bank of Canada trying to do regarding the Canadian economy? (4 marks) 15. As of June 9th, the Government of Canada has announced a massive $146-billion aid package to help Canadians and businesses cope with the global COVID-19 pandemic. Is this monetary policy or fiscal policy...
Which central bank has its exchange rate as a focus of its monetary policy? A. Bank...
Which central bank has its exchange rate as a focus of its monetary policy? A. Bank of Canada B. European Central Bank C. Bank of England D. Federal Reserve
Describe the channels by which monetary policy ripples through the economy and explain how each channel...
Describe the channels by which monetary policy ripples through the economy and explain how each channel operates. Suppose the Bank of Canada raises the overnight loans rate. When the Bank of Canada raises the overnight loans rate, it makes an open market Other short-term interest rates and the exchange rate rise. The quantity of money and the supply of loanable funds decrease The long-term real interest rate rises The higher real interest rate decreases consumption expenditure and investment. The exchange...
In general, any central bank has two alternative approaches for implementing its monetary policy. These alternatives...
In general, any central bank has two alternative approaches for implementing its monetary policy. These alternatives are O A. targeting the money supply or pursuing a stabilization policy OB. targeting the money supply or choosing an output-gap target. O c. choosing an exchange-rate target or shortening long and variable lags. O D. choosing an output-gap target or targeting the interest rate O E. targeting the money supply or targeting the interest rate
Suppose the Bank of Canada raises the overnight loans rate. Describe the ripple effects of this...
Suppose the Bank of Canada raises the overnight loans rate. Describe the ripple effects of this monetary policy. Other short-term interest rates and the exchange rate Consumption expenditure, investment, and net exports The quantity of money and supply of loanable funds Aggregate demand Real GDP growth and the inflation rate O A. rise; increase OB. fall; decrease O c. fall; increase OD. rise; decrease O A. decreases; decrease OB. increases; decrease or remain the same O c. decreases; increase or...
P Flag question "The Bank of Canada today (July 15, 2020] maintained its target for the...
P Flag question "The Bank of Canada today (July 15, 2020] maintained its target for the overnight rate at the effective lower bound of V4 percent. The Bank is also continuing its quantitative easing (QE) program" (Bank of Canada Press Release, July 15, 2020). i. Quantitative Easing (QE) is described by the Bank of Canada as one of 3 unconventional Monetary Policies. Explain carefully, (1) what Quantitative Easing, QE means in terms of the Bank's conduct of Monetary policy; and,...
want to know the answer for both the questions....thanksss ASAP 1. In The News: Bank of...
want to know the answer for both the
questions....thanksss ASAP
1. In The News: Bank of Canada increases overnight rate Canada increases overnight rate target to 14 per cent October 24, 2018- The Bank of Canada today increased its target for the to 1 34 per cent. The Bank Rate is correspondingly 2 per cent and y increased its target for the overnight rate 12 per cent is correspondingly 2 per cent and the deposit rate is 1 Questions: a)...
The following table shows two monetary policy rules. Inflation Policy Rule 1 Targeet Overnight Rate Policy...
The following table shows two monetary policy rules. Inflation Policy Rule 1 Targeet Overnight Rate Policy Rule 2 Target Overnight Rate 0 1 3 2 3 5 4 5 7 6 7 9 8 9 11 a. Graph the two policy rules. Suppose the Bank of Canada shifts from policy rule 1 to policy rule 2. b. For any given rate of inflation, what happens to the interest rate because of this change in policy? What happens to the...
Stabilization policies are often used to bring about economic equilibrium: 1. Monetary policy is implemented by...
Stabilization policies are often used to bring about economic equilibrium: 1. Monetary policy is implemented by the Bank of Canada (or Central Bank) - Manipulation of short-term interest rates - Management of the money supply 2. Fiscal policy is the responsibility of the Department of Finance and the Treasu Board - Government spending levels - Government deficit and borrowing policies Question: How would each of these policies tools be deployed to address a recessionary gap? An inflationary gap?
In January 2020, the Bank of Canada released its Monetary Policy Report and reported that its...
In January 2020, the Bank of Canada released its Monetary Policy Report and reported that its latest measures of the output gap (the difference between actual output and the maximum potential output) indicated a small amount of economic slack. What type of output gap does this refer to? For this type of output gap what do you think would be happening to the following macroeconomic variables: (1) the unemployment rate, (2) wages and (3) the inflation rate? In the last...
14. On March 13th, 2020 the Bank of Canada announced a 0.5% reduction in its trend-setting overnight lending rate from 1.25% to 0.75%. Is this monetary policy or fiscal policy and what is the Bank of Canada trying to do regarding the Canadian economy? (4 marks) 15. As of June 9th, the Government of Canada has announced a massive $146-billion aid package to help Canadians and businesses cope with the global COVID-19 pandemic. Is this monetary policy or fiscal policy...
Describe the channels by which monetary policy ripples through the economy and explain how each channel operates. Suppose the Bank of Canada raises the overnight loans rate. When the Bank of Canada raises the overnight loans rate, it makes an open market Other short-term interest rates and the exchange rate rise. The quantity of money and the supply of loanable funds decrease The long-term real interest rate rises The higher real interest rate decreases consumption expenditure and investment. The exchange...
In general, any central bank has two alternative approaches for implementing its monetary policy. These alternatives are O A. targeting the money supply or pursuing a stabilization policy OB. targeting the money supply or choosing an output-gap target. O c. choosing an exchange-rate target or shortening long and variable lags. O D. choosing an output-gap target or targeting the interest rate O E. targeting the money supply or targeting the interest rate
Suppose the Bank of Canada raises the overnight loans rate. Describe the ripple effects of this monetary policy. Other short-term interest rates and the exchange rate Consumption expenditure, investment, and net exports The quantity of money and supply of loanable funds Aggregate demand Real GDP growth and the inflation rate O A. rise; increase OB. fall; decrease O c. fall; increase OD. rise; decrease O A. decreases; decrease OB. increases; decrease or remain the same O c. decreases; increase or...
P Flag question "The Bank of Canada today (July 15, 2020] maintained its target for the overnight rate at the effective lower bound of V4 percent. The Bank is also continuing its quantitative easing (QE) program" (Bank of Canada Press Release, July 15, 2020). i. Quantitative Easing (QE) is described by the Bank of Canada as one of 3 unconventional Monetary Policies. Explain carefully, (1) what Quantitative Easing, QE means in terms of the Bank's conduct of Monetary policy; and,...
want to know the answer for both the
questions....thanksss ASAP
1. In The News: Bank of Canada increases overnight rate Canada increases overnight rate target to 14 per cent October 24, 2018- The Bank of Canada today increased its target for the to 1 34 per cent. The Bank Rate is correspondingly 2 per cent and y increased its target for the overnight rate 12 per cent is correspondingly 2 per cent and the deposit rate is 1 Questions: a)...
Stabilization policies are often used to bring about economic equilibrium: 1. Monetary policy is implemented by the Bank of Canada (or Central Bank) - Manipulation of short-term interest rates - Management of the money supply 2. Fiscal policy is the responsibility of the Department of Finance and the Treasu Board - Government spending levels - Government deficit and borrowing policies Question: How would each of these policies tools be deployed to address a recessionary gap? An inflationary gap?
In January 2020, the Bank of Canada released its Monetary Policy Report and reported that its latest measures of the output gap (the difference between actual output and the maximum potential output) indicated a small amount of economic slack. What type of output gap does this refer to? For this type of output gap what do you think would be happening to the following macroeconomic variables: (1) the unemployment rate, (2) wages and (3) the inflation rate? In the last...
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