Group items tagged

coming soon. 

This article states that Canada's inflation rate has unexpectedly slowed for a second month this past August, meaning a disinflation is taking place. The consumer price index in Canada rose 1.2% in August from a year ago compared to a 1.3% gain in July, showing a slowing down in the rate of inflation. This has reduced pressure for the Bank of Canada governor to raise interest rates. Normally, when a country's price levels are increasing and inflation is taking place, banks are encouraged to increase interest rates. Increasing them make it more profitable for consumers to borrow less and invest more, resulting in a decrease in consumption and therefore a decrease in AD. This will lower price levels in the country in the long run, solving or reducing the problem of inflation.