The Objective of the Bank of Canada's Monetary Policy Is

question 41

Multiple Choice

The objective of the Bank of Canada's monetary policy is

• A)to keep the unemployment rate below 5 percent, the inflation rate between 1 and 3 percent a year, and long-term real GDP growth above 4 percent a year.
• B)to control the quantity of money and interest rates to avoid inflation and when possible prevent excessive swings in real GDP growth and unemployment.
• C)to keep the unemployment rate below 5 percent, the inflation rate between 1 and 3 percent a year, and long-term interest rates below 4 percent a year.
• D)to keep the labour force participation rate above 80 percent, the inflation rate below 2 percent a year, and the exchange rate fluctuating by less than 3 percent a year.
• E)to keep the overnight loans rate below 2 percent a year and the unemployment rate at its natural rate.

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Definitions:

Cumulative Total Product

The total output produced by a firm after all units of inputs have been employed, illustrating the overall productivity.

Wage Rate

The amount of compensation paid to an employee by an employer in exchange for performing a job, usually expressed on an hourly, daily, or piecework basis.

Zinnia

A genus of plants within the sunflower tribe, known for their vibrant flowers and commonly grown in gardens for decorative purposes.

Marigold

A plant belonging to the genus Tagetes, known for its vibrant yellow and orange flowers, often used in gardening and as a natural pest deterrent.