Explainers (The Bank of Canada)

Latest explainers

• The difference between the price level and inflation
  Price levels are a measure of the average cost of goods and services in the economy at a particular point in time. Inflation measures the rate of change in prices over a specific period. […]
• Why we target 2% inflation
  Inflation measures the rate of growth in prices, and the Bank of Canada aims to keep it at 2%. When inflation is low, stable and predictable, the entire economy works better. […]
• What is a flexible exchange rate?
  Canada has a flexible exchange rate. The value of our dollar is not fixed to the value of any other currency or to a precious metal such as gold. […]
• The difference between a trade surplus and a trade deficit
  A trade surplus and a trade deficit are both measures of a country’s balance of trade. They are a calculation of whether a country exports or imports more. […]
• Understanding our policy interest rate
  At the heart of the Bank of Canada’s monetary policy is the target for the overnight rate. See what it is—and what it means for you. […]
• What is a tariff?
  A tariff is a tax on imports from another country. It can increase the prices consumers and businesses pay for that good. […]
• What does the Bank of Canada do?
  The Bank has five main areas of responsibility that affect Canadians’ everyday lives. […]
• How is the Bank of Canada run?
  The Bank of Canada is a Crown corporation that is run independently from the government. […]
• Is the Bank of Canada independent from government?
  The Bank of Canada is a Crown corporation that is owned by the federal government, but we are separate from the political process. […]
• Understanding quantitative easing
  QE is a tool that encourages spending and investment—helping us to achieve our inflation target by stabilizing the economy. […]

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