Canada's Monetary Policy

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

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.

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

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

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

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

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

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

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 ......

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