Suppose Canada's Terms of Trade Rises from 212 to 236

question 34

Multiple Choice

Suppose Canada's terms of trade rises from 212 to 236.This change is said to be

• A)favourable.
• B)unfavourable.
• C)neutral.
• D)prudent,since the rule of 72 is not violated.
• E)a deterioration.

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Definitions:

Long-Run Phillips

Describes the relationship between unemployment and inflation over a longer period, suggesting that in the long run, there is no trade-off between inflation and unemployment.

Natural Rate

The long-term rate of unemployment or economic output at which the economy stabilizes, without causing inflation.

Monetary Policy

The process by which the central bank or monetary authority of a country controls the supply of money, often targeting interest rates to promote economic growth and stability.

Government Policies

Measures and actions taken by a government to influence or regulate the economy and societal welfare.