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Assume that the Bank of Canada has a target inflation rate of 2% and that the values for how much the nominal target overnight rate responds to a deviation of inflation from its target,g,and how much the nominal target overnight rate responds to real GDP,h,are both 0.5.According to the Taylor rule,if inflation increases by 6%,the Bank of Canada should increase the target nominal overnight rate by
Cash Flow
The entire amount of fiscal exchange flowing in and redirecting out of a business, fundamentally impacting its liquidity level.
Financial Markets
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