In December of 2022, the Bank of Canada has raised the prime rate by 50 basis points
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Question:
- In December of 2022, the Bank of Canada has raised the prime rate by 50 basis points to 4.25%.
(10 Marks)
a. Discuss the effects of this maneuver with regards to inflation, unemployment, GDP, and the housing market in the short term. (8 Marks)
b. Do you think that the Bank of Canada was correct with its 50 basis points rise? Why or why not?(2 Marks)
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