Chapter 7

Article: Canada Holds Key Rate Steady - http://online.wsj.com/article/SB10001424052748704548604575097422816639734.html?mod=WSJ_latestheadlines

Summary: Canada's interest rates are being held steady at 0.25% following a pledge to keep the key interest rates steady. Canada's Central bank states that the key lending rate will not rise at least until the end of the 2nd quarter of 2010. This decision was made due to the fact that core inflation was slightly firmer than expected.


Connections: Chapter 7 talks about how the government plays a huge role in the money in Canada. The Bank of Canada controls interest rates for different reasons. Keeping interest rates low helps stimulate the economy by encouraging consumers to spend more. If interest rates were high, it would only encourage people to keep their money locked up to collect interest.


Reflection: I agree in what the government is doing to control interest rates. It is a good plan to help stimulate the economy and encourage consumers to spend more. I believe that once public confidence is restored, the Bank of Canada can start raising interest rates again to post-recession levels so that people can begin investing profitably again.