Explain the dilemma that low inflation and low unemployment poses for the Bank of Canada. In September
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Explain the dilemma that low inflation and low unemployment poses for the Bank of Canada.
In September 2015, the unemployment rate was 7.0 percent, the inflation rate was 0.1 percent, and the overnight loans rate target was 0.5 percent. In September 2017, the unemployment rate was 6.2 percent, the inflation rate was 1.4 percent, and the overnight loans rate target was 1.0 percent.
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The situation described presents the Bank of Canada with a policy dilemma arising from the combination of low inflation and low unemployment This crea...View the full answer
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