If the Bank of Canada Wants to Influence Real Economic

question 6

Multiple Choice

If the Bank of Canada wants to influence real economic variables in the short run,it uses

• A)policy instruments such as the exchange rate and investment to influence the economy.
• B)its only policy instrument-the overnight interest rate target-to influence aggregate demand.
• C)policy variables such as the exchange rate and investment to influence aggregate demand.
• D)policy variables such as open-market operations to influence aggregate demand.
• E)policy variables such as the money supply to influence investment and aggregate supply.

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Definitions:

Correlation Coefficient

A statistical measure that indicates the extent to which two variables fluctuate together, signaling the strength and direction of their relationship.

Significance Level

A statistical measure that indicates the probability of a particular result occurring by chance, commonly used in hypothesis testing to determine if results are statistically significant.

Internal Validity

The extent to which a research study can demonstrate a causal relationship between variables, free from the influence of external factors.

External Validity

External validity refers to the extent to which the results of a study can be generalized or extended to other situations, people, settings, and measures.