Monetary Policy

Definition

• The ability of the Bank of Canada to influence the economy through changes in short-term interest rates and the money supply.

Synonyms
financial policy, fiscal procedure

Related Terms and Acronyms

• Bank Rate — Definition,
  • Closely related to the overnight rate, the bank rate is the interest rate the Bank of Canada charges to banks and other major financial institutions for one-day loans.
• Commerce — Definition,
  • The systems and activities that impact business and trade within a nation and abroad.
• Deflation — Definition,
  • An actual decline in the general level of prices in the economy.
• Depression — Definition,
  • A prolonged downturn in the economy and level of business activity.
• Economic Indicators — Definition,
  • Statistics that help determine how the economy is faring. They include the Consumer Price Index, housing starts, and unemployment rates, among others.
• Fiscal Policy — Definition,
  • The use of government spending and taxation policies to influence the economy.
• Foreign Investment — Definition,
  • Investing money into a business in another country.
• Gross Domestic Product (GDP) — Acronym,
  • The total value of all the goods and services produced by the Canadian economy in a single year.
• Inflation — Definition,
  • A rise in the average level of prices in the economy.
• Inflation Protection — Definition,
  • A protection found in some insurance policies that allows policy limits to increase with inflation.
• Macroeconomics — Definition,
  • A study of the economy as a whole, particularly the interaction of its various components.
• Microeconomics — Definition,
  • Looking at the individual parts of the economy, with emphasis given to the market process and how it works.
• Policy — Definition,
  • A set of rules or guidelines.
  • An insurance contract.
• Prime Rate — Definition,
  • The rate suggested by the Bank of Canada on which most banks base their prime mortgage lending rate.