1. Explain how Bank of Canada uses Monetary Transmission Mechanism to run the economic system and explain the three stages used to run the economic system.

2. There are two alternative approaches for starting the implementation of monetary policy by the Bank of Canada using theMonetary Transmission Mechanism.Explain each approach separately (how tostart the process). Determine which approach does the Bank of Canada use?

3. Explain expansion and contraction of monetary policies used by the Bank of Canada.

What are their main objectives and how are they implemented?