EC250 Chapter Notes - Chapter 12: Open Market Operation, Phillips Curve, Bank Reserves
Document Summary
Monetary policy: refers to the actions the central bank takes to manage interest rates and the money supply to pursue macroeconomic goals. The bank of canada (created in 1934) has 4 tasks: conduct monetary policy, regulate financial institutions, provide banking services for the federal government (where our taxes go) 12 outside directors: governor, deputy minister of finance. The boc board appoints the governor and sr deputy officer for 7 years (longer than the period between federal elections) to reduce potential influence on the federal government on the bank of canada. Governing council: consists of the governor, senior deputy governor, and four deputy governors: makes the major decisions, decisions are made 8 times a year. Target for the overnight rate: the main policy tool of the bank of canada; the interest rate it wants to see in the overnight market. Aim of macroeconomic policy advance economic well-being. Efficient employment of labour and capital in production.
