Canadian+Monetary+Policy


 * Canadian Monetary Policy**


 * The monetary policy has to deal with one of he goals of macroeconomics. One of the goals is stable prices and in order to maintain certain prices the moentary policy has to make decisions. Some of the decisions they have to make are the following:**
 * 1) Money Supply**
 * 2) Interest Rates**
 * Both of these factors have a lot to do with how we control and maintain the balance of the economy. Interest rates affect many things that can negatively affect and positively affect the economy in different ways. When the economy is growing too fast the interest rates can be increased and the money supply can be decreased.**
 * With money supply their has always been 2 types of money. One being Fiat money, which is money declared by the government. Canada for example used Fiat money. The second money is commodity money, which is money that is good or raw material. You can sell it for value. When we increase or decrease the money supply it triggers different effect on people consumption spending and saving. Which goes hand in hand with interest rates. If people suspect high interest rates then they will not want to consume as much, but would consider investing to make money. If money supply is low then is may be a low interest rate increasing only consumption spending but also not allowing businesses to expand and strengthen our economy. And in order to grow our economy we need to stable prices along with many other goals such as, international trade and full employment in order to complete all goals of macroeconomics.**