ECON102 Chapter Notes - Chapter 30: Open Market Operation, Foreign Exchange Market, Overnight Rate

• School: University of Waterloo
• Department: Economics
• Course: ECON102
• Professor: Maryann Vaughan

Document Summary

A nation"s monetary policy objectives and the framework for setting and achieving that objective stems from the relationship between the central bank and the government. The objective of monetary policy is ultimately political. It stems from the mandate to the bank of canada, which is set out in the bank of canada act 1935. Basically, the bank"s job is to control the quantity of money and interest rates in order to avoid inlation and, when possible, prevent excessive swings in real gdp growth and unemployment. Joint statement of the government of canada and the bank of. The agreement of 2011 is: the target is the 12-month rate of change in the cpi, the inlation target is the 2 percent midpoint of the 1 to. 3 percent inlation-control range: the agreement will run until december 31, 2016. Such a monetary policy strategy is called inlation rate targeting. The inlation-control target is the trend cpi inlation rate.