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Canada (510,626)
Economics (219)
ECON 1020 (99)
Lecture 78

ECON 1020 Lecture 78: Lecture 78

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ECON 1020
Ryan A.Compton

o982 Voters hold Parliament responsible (BOC Governor not elected, he is appointed) Bank must be protected from political pressures Goals of Monetary Policy: 1. Keep inflation low, stable, and predictable PRIMARY goal is INFLATION for Bank of Canada Inflation target range of 13 annually Range allows for room to increase or decrease prices to push demand and output 2. Moderate the business cycle Troughs arent so low BOC lowers interest rates to moderate Peaks arent so high BOC raises interest rates to moderate 3. Help the economy achieve full employment and sustained growth Global Perspective 13.1: Central Banks: Canada: Bank of Canada United States: Federal Reserve System (the Fed) in Washington, DC 12 regional federal reserve banks Goals and Tools for Monetary Policy: Tools of Monetary Policy: o 1. OpenMarket Operations o 2. Bank Rate OpenMarket Operations: Bank of Canada BUYS bonds from the chartered banks Chartered bank gives BOC bonds, and the BOC gives the Chartered Bank money (increasing the chartered banks reserves) o This increases money supply of chartered banks, and increases excess reserves allowing them to give out more bonds
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