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Hello everyone
Welcome to Otto English
I’m your today’s host, Candy

Today we are going to learn some economic words by going through a recent news in Canada

The news is published by Macleans on Wednesday, July 12. And it is written by Joe Castaldo.

The title of the news is “Interest rate hike: Why Stephen Poloz still sounds anxious “

First, we are going to go through part of the article together.

The central bank has a single mandate: control inflation. So it may seem odd to raise rates at a time when pricing pressures are largely absent. The Bank of Canada even lowered its inflation projection for 2017 to 1.6 per cent from 1.9 per cent.
Poloz made two points on this topic today. First, he said the factors weighing down inflation are temporary, such as rebates from the Ontario government that have constrained consumer energy prices. Second, monetary policy can take between 18 and 24 months to fully affect inflation, so central bankers have to gauge where it’s headed in the future. The bank projects that inflation will hit two per cent again in 2019, and there is a chance it could actually overshoot.
The risk is that inflation remains weak. Wages, for example, haven’t exactly been rising at a robust pace even though the labour market is picking up steam. Oil prices are projected to remain low, too. Canada is not alone in this regard. Many developed countries are dealing with low inflation even as economic indicators show signs of strength. The Bank of Canada notes that temporary factors are not the only thing keeping inflation low and that “global structural factors...may be playing a larger role than believed.” To take one example, the rise of e-commerce has increased competition in the retail sector, potentially keep pricing pressures at bay.
If inflation doesn’t meet the bank’s expectations, there is a possibility that higher rates could cut off economic growth—all the more reason for Poloz to keep a watchful eye now that the bank has finally moved on rates.

Stephen Polo: Stephen Poloz, the governor of the Bank of Canada, is concerned about the Bank of Canada’s decision to increase its interest rate
Thesis: The pessimistic projection in inflation contributed to one of Poloz’s major concerns
Inflation: Increase in price level

In the paragraph, it says that Today’s inflation in Canada is too low that it is expected to raise above two percent in 2019; therefore, central banks set a high interest rate as a precaution to future’s inflation

Why BOC wants a high interest rate? As interest rates increase, more people are willing to borrow money with high returns, so people spend less. This result in a decrease in consumption and shifts AE and AD curve to the left with a decrease in inflation.

A question addressed here: Although the Bank of Canada wants to keep inflation low, it still targets the inflation for two percent instead of zero. Why does an economy want inflation more than zero?

There are two main reasons for why a zero inflation is not favourable compared with a stable low inflation

First, Japan once achieved a zero inflation in 2001 by setting the interest rate to zero to eliminate its deflation situation. Japan was under a deflation situation when it targeted a zero inflation. A deflation situation is very harmful to an economy as it discourages consumptions. People tend to save money for future lower prices products so the current consumption will fall. When the consumption falls, the AE and AD curve shifts to the left and AD curve intersects with AS curve in a new point which provides a lower GDP. A zero inflation is always unstable and very likely to become deflated in an economy.

Second, inflation is necessary to generate economic growth by keeping the flow of money supply. By examining money supply and inflation rate in Nigeria, money supply is defined to have a unidirectional casualty to inflation rate that increasing inflation in Nigeria is corresponding to the amount of money supply (Olorunfemi and Adeleke, 2012). Since fiat currency has been developed, they possess purchasing power which is determined by demand of currency in the economy. Under the bank’s reserve system, it requires banks to print money and inject them to the economy for paying back the currency. As money supply increase, there is more money available to purchase goods and services. So the price level rise and the quantity of money demanded increases. Finally, GDP rises as the consumption increases with lower interest rates presence in the economy.

There are again several words we need to know for understanding the above two paragraphs.

interest rate: is the rate which set by the central banks to determine the amount of interest you need to pay back to money you borrowed from the bank. It is also the amount of interest you will get by depositing your money in the Bank.

deflation: deflation is the opposite to inflation. So deflation means the price level is decreasing.

consumption: consumption means the purchases of goods and services by households in an economy

economy: economy means the whole country as an economy

AE curve is the aggregated expenditure curve, which is determined by the total expenditure in an economy

AD curve is the aggregated demand curve, which is determined by the AE curve when AE equals to national income

National income: National income is GDP

AS curve is the aggregated supply curve

fiat currency is the currency authorized by government

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You can't change the past,so focus on making a great future.Type"Yes"if you agree.
你无法改变过去，所以还是专注创造一个好的未来。同意的话，输入“Yes”.

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As I grow older,I pay less attention to what people say.I just watch what they do.
随着年龄的增长，不再像以前那样注意别人的言语，而是只关注他们的行为。

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Meanwhile, a peace rally organized by pop star Gazelle was marred by protest.
Go back to the forest, predator!
I’m from the Savannah.
Zootopia is a unique place.
It’s a crazy, beautiful, and diverse city, where we celebrate our differences.
This is not the Zootopia I know.
The Zootopia I know is better than this.
We don’t just blindly assign blame.
We don’t know why these attacks keep happening.
But it's irresponsible to label all predators as savages.

rally ['ræli] n.集会
mar [mɑr] v.破坏，损毁
protest [prəˈtɛst;protɛst] n. 抗议
savage ['sævɪdʒ] n. 野蛮，残暴的人

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Fear, treachery, blood lust.
Thousands of years ago these were the forces that ruled our world.
A world where prey were scared of predators.
And predators had an uncontrollable biological urge to maim, and maul, and…
Ah! Blood! Blood! Blood! And death.
Back then, the world was divided in two, vicious predator, or meek prey.
But over time, we evolved, and moved beyond our primitive savage ways.

I don’t have to cower in a herd anymore.
Instead, I can be an astronaut.
I don’t have to be a lonely hunter anymore.
Today, I can hunt for tax exemptions.
I’m gonna be an actuary.
And I can make the world a better place.
I am going to be…
A police officer!
Ah ha ha! Bunny cop?
That is the most stupidest thing I ever heard.
It may seem impossible to small minds.
I'm looking at you, Gideon Grey.
But, jut 211 miles away, stands the great city of Zootopia, where our ancestors first joined together in peace and declared that anyone can be anything!

treachery ['trɛtʃəri] 背叛
blood lust [lʌst] 杀戮欲
prey [preɪ] 被捕食的动物 predator ['prɛdətɚ] 捕食者，食肉动物
maim [mem] 使残废 maul [mɔl] 打伤
vicious ['vɪʃəs] 恶意的 meek [mik] 温顺的
primitive ['prɪmətɪv] 原始的
savage ['sævɪdʒ] 野蛮
cower ['kaʊɚ] 蜷缩
actuary ['æktʃuɛri] 保险精算师

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I like people who don`t need everyone to like them.
我喜欢那些不需要所有人都喜欢的人。

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People can be mean.Don't take it personally , it says nothing about you, but a lot about them.
人是会刻薄的。不要往心里去。这只能说明他们不好，而不是你不好。

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的确，哪怕爱明天让你遍体鳞伤，但是今天你还是要爱，哪怕它只有一瞬间，因为在你爱的那一刻，这个世界真的是无与伦比的美好。

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I know you are tired.I know you are physically and emotionally drained.
But you have to keep going.
我知道你累了。我知道你身心都被掏空。但你要继续下去，知道吗？

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Everything will come to you at the perfect time.
别着急，只是时候未到。