Canada's Monetary Policy

Please choose the most appropriate answer for each sentence.
  • 1

    Monetary policy is concerned with how much money ..... in the economy, and what that money is worth.

  • 2

    The ..... of the Bank of Canada's monetary policy framework is its inflation-control system, the goal of which is to keep inflation near 2 per cent.

  • 3

    Inflation is a ..... rise over time in the average price of goods and services.

  • 4

    This system provides a clear ..... of the effectiveness of monetary policy, and increases the predictability of inflation.

  • 5

    When the level of demand for Canadian goods and services is ....., it can push the economy against the limits of its capacity to produce.

  • 6

    This tends to raise inflation above the midpoint, so the Bank will raise interest rates to ..... off the economy.

  • 7

    When demand is weak, inflationary pressures are likely to ......

  • 8

    The Bank will then lower interest rates to stimulate the economy and absorb economic ......

  • 9

    The Bank carries out monetary policy by influencing short-term interest rates, and it does this by raising and lowering the target for the overnight rate, the interest rate at which major financial institutions borrow and lend one-day funds among ......

  • 10

    The goal of Canadian monetary policy is to contribute to rising living ..... for all Canadians through low and stable inflation.

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