Suppose Canadian Real GDP Is Equal to Potential GDP

question 104

Multiple Choice

Suppose Canadian real GDP is equal to potential GDP.A significant and sustained appreciation of the Canadian dollar would likely lead the Bank to engage in a contractionary monetary policy if the Bank's policy experts traced the cause of the appreciation to

• A)a decrease in the overnight lending rate.
• B)an increase in the desire of non-residents to purchase Canadian financial assets.
• C)an increase in the desire of non-residents to purchase more Canadian goods and services.
• D)a reduction in Canada's core inflation rate.
• E)a recession in Canada.

---

Definitions:

Patrick Henry

was an American attorney, planter, and orator best known for his declaration to the Second Virginia Convention (1775): "Give me liberty, or give me death!"

Samuel Adams

An American statesman, political philosopher, and one of the Founding Fathers of the United States, known for his role in organizing the Boston Tea Party and in forming the Continental Congress.

Political Institutions

Structures and systems within a society that govern the conduct of public affairs, politics, and policy-making.

James Madison

The fourth president of the United States (1809-1817) who is known as the "Father of the Constitution" for his pivotal role in drafting and promoting the U.S. Constitution and the Bill of Rights.