Today, bank of canada increased their interest rates by .5 percent. Being a dumb, what’s the reason behind it. How does it impact a common man in day to day spendings?
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Many people have mortgages, car loans, and other kinds of debt. When interest rates go up, the interest rates on those loans also go up. This (in theory) means that people have less money to spend, which slows down demand, which slows down or stops inflation.
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