The interest rates, controlled by the bank of Canada, can stimulate demand. Decreases in mortgage rates increase housing purchases and businesses may take advantage of lower rates to finance expansion.
Employment plays a vital role in the new venture. If there is an acceptable level of employment, there is less social apprehension about one’s job and the inclination to spend on consumer goods and services is strong. If, however, there is a perceived threat to one’s job because of high unemployment, there is the tendency to restrict spending and decrease aggregate demand