In 2011,the Bank of Canada Was Facing

question 106

Multiple Choice

In 2011,the Bank of Canada was facing:

• A) hyperinflation,which can be reversed only with disinflationary policies.
• B) stagflation,a combination of high inflation and high unemployment,which cannot be reversed easily.
• C) the deepest recession since the Great Depression combined with rapidly falling prices.
• D) a very severe deflation,rare in history,which was experienced only by Japan.

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Definitions:

Derivatives Markets

Markets where financial instruments, whose value is derived from other assets, are traded. These include futures, options, and swaps.

Transferring Risk

Shifting potential financial loss to another party through mechanisms like insurance, hedging, or outsourcing, to manage vulnerability to risk.

Investing

The process of distributing funds or resources with the aim of earning a return or profit.

Interest Income

Income earned from deposit accounts or investments that pay interest, such as bonds and savings accounts.