To Remove an Inflationary Gap,the Bank of Canada Would Probably

question 43

Multiple Choice

To remove an inflationary gap,the Bank of Canada would probably seek to

• A)increase its target for the money supply.
• B)decrease its target for the overnight interest rate.
• C)increase its target for the overnight interest rate.
• D)decrease the bank rate.
• E)buy government securities through open-market operations.

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Definitions:

Free Energy

A thermodynamic quantity that represents the amount of work that can be performed by a system at a constant temperature and pressure.

Entropy

Disorderliness; a quantitative measure of the amount of the random, disordered energy that is unavailable to do work.

Cofactor

A nonprotein substance needed by an enzyme for normal activity; some cofactors are inorganic (usually metal ions); others are organic (coenzymes).

Enzymes

Biological catalysts that speed up chemical reactions in cells without being consumed in the process.