Question: 3. Read this article (https://www.bankofcanada.ca/2020/08/understanding-inflation-targeting/) about Understanding inflation targeting and answer the following questions: (20 points) a. Why does Bank of Canada have a

3. Read this article (https://www.bankofcanada.ca/2020/08/understanding-inflation-targeting/) about Understanding inflation targeting and answer the

3. Read this article (https://www.bankofcanada.ca/2020/08/understanding-inflation-targeting/) about Understanding inflation targeting and answer the following questions: (20 points) a. Why does Bank of Canada have a target for inflation? b. When does inflation deviate from the target? And how does central bank respond when inflation deviate from the target? 4. What is the difference between fiscal and monetary policy? (15 points) 5. When the government spends more than it takes in taxes it must borrow money to finance its expenditure. How does expansionary fiscal policy affect government's debt? (10 points)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

3 a The Bank of Canada has a target for inflation because a low stable and predictable rate of inflation is good for the economy According to the arti... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!