The Three Figures Below Show the Phases of a Disinflation

question 39

Multiple Choice

The three figures below show the phases of a disinflation.In part (i) ,the economy is experiencing a sustained inflation at E₁. FIGURE 29-4 Refer to Figure 29-4,part (i) .The elimination of the inflationary gap would normally be initiated by

• A)workers accepting a reduction in their wage growth.
• B)an increase in the productivity of workers.
• C)the Bank of Canada engaging in an expansionary monetary policy.
• D)the Bank of Canada stopping the ongoing monetary expansion.
• E)the government engaging in tax cuts and increasing transfer payments.

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Definitions:

Nontariff Barrier

Measures other than tariffs that restrict imports or exports of goods and services, such as quotas and regulations.

Forum Selection Agreement

A contractual clause in which the parties choose the location where disputes between them will be resolved.

UCC

Denotes the Uniform Commercial Code, an extensive series of statutes that regulate every commercial transaction across the United States.

CISG

The United Nations Convention on Contracts for the International Sale of Goods, a treaty that provides a uniform set of rules for the international sale of goods.