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Any Central Bank, Including the Bank of Canada, Can Implement

question 92

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Any central bank, including the Bank of Canada, can implement its monetary policy by directly influencing either or , but not both.


Definitions:

Spillovers

Refers to the impact that an economic activity has on unrelated third parties, which can be either positive or negative.

Marginal Cost

The financial outlay required to produce one more unit of a product or service.

Public Good

A good that is non-excludable and non-rivalrous, meaning it can be used by many people without depleting its availability to others.

Private Goods

Goods that are both excludable and rival in consumption, meaning only paying customers can use them and one person's use diminishes others' ability to use them.

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