(1)The Coyne affair resulted from the implementation of Select one: a. tight mon
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(1)The Coyne affair resulted from the implementation of Select one: a. tight money policies in the face of low unemployment. b. tight money policies in the face of high unemployment and low economic growth. c. easy money. d. easy money policies in the face of high unemployment and low economic growth. (1)The Coyne affair resulted from the implementation of Select one: a. tight money policies in the face of low unemployment. b. tight money policies in the face of high unemployment and low economic growth. c. easy money. d. easy money policies in the face of high unemployment and low economic growth. Select one: a. tight money policies in the face of low unemployment. b. tight money policies in the face of high unemployment and low economic growth. c. easy money. d. easy money policies in the face of high unemployment and low economic growth.Explanation / Answer
The Coyne affair resulted from the implementation of -
B) Tight money policies in the face of high unemployment and low economic growth.
Mr. Coyne had been appointed as governor by the previous liberal govt. on the retirement of bank of canada's first governor ,graham towers ,at the end of 1954.Sources says that he was a man of strong views and had rubbed lot of people inside and outside the bank in the wrong way found him difficult to work with.He also had many critics among professional economists .
In 1957 ,minority conservative conservative government under diefenbaker was elected who had denounced the prevailing tight monetory of bank of canada.
At that time canadian economy was experiencing rising inflation which touched 3.2% in dec 1956 ,up from 0.5% the previous year .Interest rates were also rising .
Government officials urged Coyne to lower interest rates and create economic activity .Coyne said that easy money were creating a debt crises and that canada was relying too much on capital export and loans from US and wanted to formulate tight money policy.
Matter comes on peak when coyne raised his own pension ,to $25000, which Diefenbaker deemed excessive .the Conservative majority in the house of commons passed a bill declaring his position vacant but was rejected by liberal controlled senate of canada . But coyne resigned next day.This incident of public disagreement between the goverment of john diefenbakerand governor of bank of canada is called "coyne affair ".
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