The Bank of Canada Promptly Cut the Interest Rate at the Beginning

Multiple Choice

The Bank of Canada promptly cut the interest rate at the beginning of the 2007-2009 global financial crisis, even though the recession did not actually begin until some months later.Which of the following is the rationale for this action?

A) The Bank of Canada inadvertently engaged in a procyclical policy as opposed to countercyclical policy.
B) A new policy must be quickly implemented to do good.
C) Rising growth rates over time mean recessions are not as steep as time moves on.
D) Inaccurate Statistics Canada data was analyzed by the Bank of Canada's economists, which showed the recession was already underway.
E) The Bank of Canada was focused on the rising value of the Canadian dollar at the time.