Question 2: Legislative Overview Please discuss 2 important institutions in Cana

Question

Question 2: Legislative Overview

Please discuss 2 important institutions in Canada responsible for conducting fiscal and monetary policy, name the Department of Finance and the Bank of Canada. What are the roles of each and what are each responsible for obtaining? What are the responsibilities of each institution and what tools do they have at their disposable to impact the economy? Can you say that their objections are in tandem with one another or due they sometimes conflict? Please explain.  

Explanation / Answer

Bank of Canada:

Finance Department:

There are many instances, where monetary and fiscal policies faced conflict. Main cause of conflict is different primary focus areas of fiscal and monetary policies. Monetary policy seeks to stabilize economy by reducing supply of money while fiscal policy seeks to increase investments and demand in economy which increases inflation rate.

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