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

question 80

Multiple Choice

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

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

---

Definitions:

FICA-OASDI

Federal Insurance Contributions Act - Old Age, Survivors, and Disability Insurance, a U.S. payroll tax that funds Social Security and is shared between employers and employees.

Cumulative Earnings

The total amount of money earned by an employee since the start of employment or over a specific accounting period before deductions.

Federal Income Tax

Government-imposed earnings tax for entities operating within the United States, calculated based on income brackets.