ipl-logo

Bank Of Canada Case Study

1213 Words5 Pages

THE BANK OF CANADA
The Bank of Canada is the Canada’s central bank. It was established in 1935. The governor of the Bank is appointed by the federal government. The current governor is Stephen S. Poloz.

The Bank of Canada pursues inflation targets laid down by the government but makes its own decisions on how best to achieve those goals.

MONITARY POLICY OF CANADA
Monetary policy is a set of decisions a government makes, through its central bank, about the amount of money in circulation in economy. In Canada, monetary policy is conducted by adjusting short-term interest rates to achieve a rate of monetary expansion consistent with maintaining a low, predictable and relatively stable rate of inflation.

Monetary policy in Canada has three …show more content…

The Bank’s policy decision to change the target overnight interest rate has direct effect on the gradual change in the amount of money circulating in the economy. This is only one instrument for monetary policy.

The Consumer Price Index

The Consumer Price Index (CPI) provides a broad measure of cost of living. While there are also other ways to measure price changes, CPI is the most important indicator for its widespread use, for example, it is used to calculate changes in government payments like the Canada Pension Plan and Old Age Security.

Through the CPI, Statistics Canada tracks the retail price of a representative sample of shopping basket of about 600 goods and services from an average household’s expenditure on food, clothing, transportation, furniture, housing and recreation on a monthly basis.

Prices are measured against a base year of 2002 and the basket for that year 2002 is given the value of …show more content…

The Bank also monitors a set of core inflation measures, which strips out eight most volatile CPI components. This core measures allow the Bank to monitor temporary changes in total CPI inflation by focusing on the underlying trend in inflation. In this sense, core inflation is regularly monitored as an operational guide to help the Bank achieve the total CPI inflation target.

The other most important element of Canada’s monetary policy framework is flexible exchange rate. A floating Canadian dollar allows Bank to pursue an independent monetary policy that is best suited to Canada’s economic circumstances and have its focus on achieving the inflation target. Movements in the exchange rate also provide a buffer, which helping our economy to absorb and simultaneously adjust to external and internal shocks.

When the Bank of Canada has clearly stated objectives and takes monetary policy actions that affirm those objectives, this result in an increase in its credibility. This credibility helps to keep expectations of future inflation close to the target―what is also called an anchoring of inflation

Show More
Related

The Pros And Cons Of Crown Corporations

498 Words | 2 Pages

Public utilities owned and operated by crown corporations allow consumers to enjoy services (ex. transportation) for a lower price than a private enterprise would offer. The Bank of Canada is the nation’s central bank that was established in 1934 under the

Read More

Craig Markham Analysis

1276 Words | 6 Pages

This method of legal governance was created based upon the common law system that is used in England and in some areas of Scotland. This organizational hierarchy is considered bi-jurisdictional, which is a result of the public and private laws being separated into the jurisdictions of the Parliament and the individual Provinces. Regardless of which unit is governing, each legal system is responsible for upholding the laws written in the Canadian Constitution. The Canadian Parliament has sole control over the transportation and energy infrastructures of the country, no matter which Province they reside

Read More

Explain How Does The Federal Government Regulate The Economy

279 Words | 2 Pages

This gives government the ability to keep a steady balance in the economy. Another way the federal government can regulate money is by the monetary policy, which gives the government the ability to manipulate the money supply. As long as this power isn 't abused it can help restore order in the economy. Use what you’ve learned about the structure of Russia’s government and the power of its branches to describe how public

Read More

The Pros And Cons Of The Monarchy In Canada

564 Words | 3 Pages

The founding fathers of Canada when they put down the agreement of the Confederation did not envisage many cases such as the power of controlling the water sources. There are many differences over the ruling power between the federal government and the provinces, which makes the role of the queen critical in ruling between them (Salter & Hebert, 2014). The second role of the Queen in Canada is leading the crown institutions whose job does not depend on the parties at power, the RCMP, and the Central Bank of Canada are examples of these institutions that are supervised by the Queen and their leaders are nominated by

Read More

Mackenzie King And Sir John A. Macdonald's Analysis

1574 Words | 7 Pages

Macdonald often called the father of Confederation, he is the first and second longest serving prime minister in Canada for that many consider him the best leader in Canada. For example said Wilfrid Laurier, said in the House of Commons, June 8, 1891: "It may be said without any exaggeration whatever, that the life of Sir John Macdonald, from the time he entered Parliament, is the history of Canada. " Conservative Senator Hugh Segal said “Macdonald 's legacy to the country is the country itself,” Macdonald shaped the modern Canada and wanted to see it united. He foresaw the expansion of Canada “from sea to sea” and during his leadership, aside for the four original province, Manitoba, British Columbia and Prince Edward Island joined Canada.

Read More

William Lyon Mackenzie King's Impact On Canada

1054 Words | 5 Pages

William Lyon Mackenzie King, a man of glory, forever changed Canada’s constitution during the tumultuous nineteenth century and resolved all difficulties Canada faced on its way to becoming a strong, independent, and autonomous nation. His contributions and sanctions targeted all factors at the time and had interrelated effects on the construction of Canada. Unlike other Canadian politicians, King handled every crisis with thorough planning and achieved promising outcomes from unsolvable problems. It is without a doubt that King was the most influential figure in Canada’s development. His role in the autonomy, economic development, and social stability stands as solid evidence of the pioneering impacts he had on Canada’s advancement.

Read More

Federal Reserve Outline

836 Words | 4 Pages

The Federal Reserve controls over the federal fund rates give it the ability to influence the general level of short-term market interest rates. The Fed has three main tools at its disposal to influence monetary policy which are the open-market operations, discount rate, and reserve requirements. b. Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and rate of the money supply, which in turn affects interest rates. The concept of Monetary Policy simply stated is that the cost of credit is reduced, more people and firms will borrow money and the economy will heat up. c. The controls that Federal Reserve used worked because the use of the three main tools the Fed uses is the most important that can manipulate monetary policy.

Read More

Summary: The Canadian Parliamentary System

866 Words | 4 Pages

As a head of our government, the leader of our nation and the individual that Canadians look to for change and prosperity, the Prime Minister (next to the Governor General of Canada) holds the greatest amount of governing power. Democratic parliamentary systems like the one in Canada, compromise with their general population in order to give the people a voice within government. It is important to understand how the parliamentary system works in order to understand what administrative powers the Prime Minister executes and whether they are effective or not. The presence of a responsible government ensures Canadians that the governing body is an elected assembly instead of having a monarch in power. The Prime Minister, citizens of Canada, as

Read More

Hi-Value: The Everyday Low Pricing Strategy

762 Words | 4 Pages

We don’t want to risk it and make it too low by reducing the price by 10%. There is a potential increase in market share by reducing the price by 7% in only the grocery and produce markets. The gross profit margin with efficiencies means updated prices, people don’t need to tag shelves, lower inventory costs, lower supplies, and labor expense which makes Option 3 so attractive. The price will be best if reduce only 7% in those two categories. The categories we choose addresses the issue of consumer perceptions of higher prices by increasing the perception of value for customers of the most popular grocery items.

Read More

External Factors Of Chick-Fil-A

1130 Words | 5 Pages

Often, individuals with higher income have flexible regarding purchases considering that they have enough financial power to use on basic needs and to save. As a result, such individuals are expected to buy the company products in bulk or more frequently irrespective of the price of the products. On the other side, low-income earners are not expected to purchase the company products in bulk or frequently. Nevertheless, consumer income is widely affected by the rate of inflation which determines the amount of money they receive as salaries and wages as well as the prices of the company’s product. Inflation is widely defined as the continued increase in prices of products and consumers.

Read More

Quebec's Multicultural Culture

1232 Words | 5 Pages

the responsibilities and powers are divided between the federal branch and provincial executives. This includes federal jurisdictions such as international affairs, defence, immigration, criminal law, customs and border control. The provincial governments are responsible for, or share control over, health care, education, and driver licensing and registrations, among other items. As one of Canada’s founding provinces and the only province with a Francophone majority, Quebec’s provincial government has a significant degree of

Read More

Suicide In Canada Essay

425 Words | 2 Pages

Canada, as one of the wealthiest countries in the world, has a unique economy system which integrated the public and private enterprises with a public to private property ratio of 40:60 indicating a high level of economic freedom in the nation (Sawe, 2017). As a member of The Organization for Economic Co-operation and development and Group of 7, Canada has the 11th largest economy as ranked by the nominal GDP and it ranked at 15th by the purchasing power parity (Sawe, 2017). In Canada, the service industry is dominant in the economy as three quarter of the population are employed in this particular industry (Sawe, 2017). Although the Canada’s economy dominated by the service industry, it is also one of the leading producer of natural resources

Read More

Competitor Analysis Of Marigold

1362 Words | 6 Pages

In addition, Dutch Lady uses psychological pricing such as odd pricing. For example, 1 liter of Dutch Lady Pure Farm Low Fat Milk is cost RM6.09 (However, it is still slightly expensive compare to Marigold, as it costs RM5.99 in retail price). F&N price is slightly lower compare to Dutch Lady, but comparing to Marigold, the retail price is same, it costs RM5.99, it turns out that brand recognition is vital to them regardless of pricing. Yeo’s SoyRich Original Soy Milk 1 liter is cost RM3.39, however, Marigold Soya Bean Drink 1 liter only cost customers RM2.55, for the price-sensitive customers, they are willing to choose Marigold instead of Yeo’s

Read More

Literature Review Of Inflation

1055 Words | 5 Pages

CHAPTER 2 LITERATURE REVIEW INFLATION (InvestorWords, 2015) stated that inflation is the increase in the general price level of goods and services in economy, normally caused by excess supply of money. Inflation usually measured by the Consumer Price Index (CPI). When the cost of producing goods and services goes up, the purchasing power of dollar will decrease. A customer will not be able to purchase the same goods and services as he/she previously could.

Read More

Roles Of Money In Macroeconomics Essay

1772 Words | 8 Pages

This is primarily a tool at the disposal of the central bank of a country which uses different tools to manage the macro economic variables of a country to keep the economy stable or to stabilize it in situations of fluctuations. Monetary policy can be expansionary or contractionary depending on whether the money supply is being increased or decreased in the system so as to affect economic growth, inflation, exchange rates with other currencies and

Read More

More about Bank Of Canada Case Study

Related Topics

Open Document