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To counteract transmission breakdowns, the Bank of Canada used quantitative easing —flooding the financial system with money by buying risky bonds, mortgages, and assets from banks. These liabilities on bank balance sheets were replaced with cash assets, enabling banks to make new loans. During the Global Financial Crisis, to counteract transmission breakdowns, the Bank of Canada “Yes" and "No" camps agree that markets need a government-like central bank to function properly. They agree that banks around the world are regulated because of a trade-off between profits and prudence. There are disagreements between the two camps on monetary policy. The "Yes" camp favours hands-off rules for monetary policy. This camp likes targets that leave no discretion for central bankers and no opportunity for politicians to influence monetary policy. The "Yes" camp believes government failure is more \v__ likely than market failure. The "No" camp favours hands-on government discretion for monetary policy to correct transmission breakdown. This camp also favours allowing democratically elected politicians to set policy. The "No" camp believes market failure is more likely than government failure. Both the "Yes" and "No" camps largely agree that inflation-control targets are an effective compromise between the hands-off emphasis on rules and the hands-on emphasis on government discretion. The government and the Bank of Canada jointly set the inflation-control target, while the largely independent Bank of Canada alone conducts the monetary policy for achieving that target. With an inflation-control target, the Bank of Canada automatically takes policy action to counter an inflationary boom (by raising interest rates to step on the brakes) or a recessionary bust (by lowering interest rates to step on the accelerator). Which of the following statements is true regarding Canada's monetary policy? There is a central bank with considerable independence that is ultimately responsible to Parliament A