Answer to Question #188360 in Economics of Enterprise for Lilyann

Question

Has the bank of Canada done anything to influence the supply of money?  Have interest rates been adjusted for this current climate?  (Application - 2 marks)

Answer 1

It is not able to control the money supply  directly, because the deposit portion of the money supply results from decisions made within the private banking system. The mortgage Bankers Association expects rates to rise to 3.7 percent by the end of the year as a result of the pandemic.