ADMS 1010 Lecture Notes - John Diefenbaker, Hard Currency, Quick Ratio

• School: York University
• Department: Administrative Studies
• Course: ADMS 1010
• Professor: Rebecca Jubis

Document Summary

Canadian economy (cyclical expansions of 3 stages: demand for consumer goods, infrastructure expenditures, housing, strong immigration. The goal of monetary policy is to rising living standards for all canadians through low and stable inflation: graham towers changed the bank rate twice. (governor) not actively pursue on monetary policy, he only. Later took over by coyne (governor), he changed the bank rate 6 times and raising it each time. Coyne emphasized the impact of inflation, encouraged economic growth and eliminated unemployment: he continue to against inflation, because inflation causes inefficiency, injustice, produce recession. To the bankers: he demanded the bank has to have 15% liquidity ratio and. This high ratio made the bank become less flexible and led the central bank to have full control of charter banks" asset. Later, he replaced the fixed bank rate with a floating rate, because 1) a rate higher than market rate can discourage borrowing, 2) floating rate can respond quickly to changes in market.