Lecture 4 Govt Resp for Economy 2013

What can the government do about growing the economy

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: What can the government do about inflaVon? •  Bank of Canada to set policies, not government (because inflaVon is about expectaVons) •  InflaVon targets (currently 2%) •  Monetary policy: Contract money supply •  Fiscal policy: Government surpluses •  Set high interest rates What can the government do to keep interest rates low? •  Set a low ‘bank rate’ (interest charged by central bank to other banks). •  Keep inflaVon expectaVons low. •  Keep Vght control of money supply. •  Central Bank to buy debt (known as quanVtaVve easing) providing this does not cause inflaVon. What can the government do about growing the economy ? •  Keynesian sVmulus during recessions (if it doesn’t cause inflaVon). •  Low interest rates (if it doesn’t cause in...
View Full Document

This note was uploaded on 01/13/2014 for the course ADMN 3400 taught by Professor Johnbishop during the Fall '13 term at Trent University.

Ask a homework question - tutors are online