Beginning from a Position of Long-Run Equilibrium,a Contractionary Monetary Policy

question 22

Multiple Choice

Beginning from a position of long-run equilibrium,a contractionary monetary policy by the Bank of Canada causes

• A)a fall in most market interest rates.
• B)an increase in the general price level.
• C)aggregate demand for goods and services to exceed potential output.
• D)potential output to exceed aggregate demand for goods and services.
• E)an increase in potential output.

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Definitions:

Zajonc's Hierarchy

A theory that proposes the sequence of cognitive processes involved in the appraisal of stimuli, emphasizing the primacy of affective responses over cognitive evaluations.

Effects Model

A model or theory in the fields of psychology or communication that describes the potential impacts of media and messages on individuals or societies.

ABC Model

A framework in cognitive behavioral therapy (CBT) that describes the relationship between an event (Activating event), beliefs (Beliefs), and consequences (Consequences).

Attitude Components

The cognitive, affective, and behavioral aspects of an attitude that respectively represent beliefs, feelings, and intentions towards an object or issue.