559 $
© 2014 Pearson Canada Inc.$
The Bank of Canada's anti-inflation policy during the 1982-1988 period can be viewed as
one where ____ became the operating target and ____ was the intermediate target.
A) the interest rate; the inflation rate
B) the interest rate; the exchange rate
C) the monetary base; the inflation rate
D) the monetary base; the exchange rate
Answer: B
Diff: 1 Type: MC Page Ref: 465
Skill: Applied
Objective List: 18.4 Outline Bank of Canada policy procedures from a historical perspective
The Bank of Canada adopted inflation targets ____.
A) because the 1982-1988 checklist approach to policy made it difficult for the Bank to control
money growth and inflation
B) following a three-year campaign to promote price stability as the long-term goal of monetary
policy
C) by announcing explicit targets for the inflation rate, rather than for money growth
D) All of the above.
Answer: D
Diff: 1 Type: MC Page Ref: 465 - 466
Skill: Applied
Objective List: 18.4 Outline Bank of Canada policy procedures from a historical perspective
Since 1989, the Bank of Canada used ____ as the operating target and ____ as the
ultimate goal of monetary policy.
A) the overnight interest rate; the exchange rate
B) the overnight interest rate; the inflation rate
C) the monetary base; the inflation rate
D) None of the above.
Answer: B
Diff: 1 Type: MC Page Ref: 466
Skill: Applied
Objective List: 18.4 Outline Bank of Canada policy procedures from a historical perspective
In its most recent attempt in lowering the inflation rate, the Bank of Canada announces
explicit targets for the rate of change in the CPI, because the CPI ____.
A) is the most commonly used and understood price measure in Canada
B) comes out monthly and without revisions, whereas other price measures are frequently
revised
C) Both A and B of the above.
D) None of the above.
Answer: C
Diff: 1 Type: MC Page Ref: 466
Skill: Recall
Objective List: 18.4 Outline Bank of Canada policy procedures from a historical perspective